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Hon.  Walter  L.  Bragg, 

OF   ALABAM/.. 


Hon.  Aldace  F.  Walker, 

OF   VERMONT. 


THE    INTl-R-STATF.    ''OMMKRCE   COMMISSION. 


(f^CU^VT^     O 


LIGHT    ON    THE    LAW: 
A   REFERENCE   BOOK 


.. 


THE  ACT  TO  REGULATE  COMMERCE. 

THE  INTER-STATE  COMMERCE  LAW,  AS  ENACTED, 

THE  ORIGINAL  REAGAN  AND  CULLOM  BILLS, 
DEBATES  IN  CONGRESS  ON  RAILWAY  REGULATION, 

Interpretations  of  the  Law  by  Railway  Officials  and 
Associations, 

organization  and  official   action   of  the  inter- 
state   COMMERCE    COMMISSION, 
Etc.,     Etc.,     Etc. 


CHICAGO: 
THE   RAILWAY   AGE    PUBLISHING   COMPANY. 

1887. 


GIFT  OF 

Banoron 
LIBRARY 


*c 


TABLE    OF    CONTENTS. 


PAGE. 

THE  ENTER-STATE  COMMERCE  COMMISSION,        -                                 -  7 

THE    INTER-STATE    COMMERCE    LAW,               -  9 

THE    ORIGINAL    REAGAN   BILL,                                                                         -  -         24 

THE    ORIGLNAL   CULLOM   BILL,             -----  28 

DEBATES   ON   THE    INTER-STATE    COMMERCE    BTLL: 

REMARKS   OF    SENATOR    CULLOM,                                                 -  37 

REMARKS   OF    SENATOR    WILSON,     -  -         42 

REMARKS   OF    SENATOR    PLATT,  51 

REMARKS   OF    SENATOR    CULLOM,    -  -         82 

REMARKS   OF    SENATOR    STANFORD,        -  104 

REMARKS   OF    SENATOR   CULLOM,     -  ...      109 

REMARKS   OF    REPRESENTEE    CRISP,     -                                  -  118 

PROTEST   OF  MINNEAPOLIS   BOARD   OF   TRADE,  -      139 

MIL    ALBERT   FINK'S   INTERPRETATION   OF    THE    LAW,        -  143 

PRESIDENT   ALEXANDER'S    CRITICISM    OF    MR.    FINK'S   VIEWS,  -      150 

MR.    FINK'S    REPLY    TO    PRESIDENT    ALEXANDER,                 -                 -  152 

MR.   GEORGE    R.    BLANC  HARD. — THE    REAGAN    AND    CULLOM    BILLS 

COMPARED,       -------  156 

INTERPRETATIONS   OF    THE    LAW   BY   RAILWAY   ASSOCIATIONS,  -      170 
ARGUMENT     ON     BEHALF     OF     THE     SOUTHERN     RAILWAY     AND 

STEAMSHIP    ASSOCIATION,         -----  191 

RULINGS   OF   THE   INTER- STATE   COMMERCE   COMMISSION,        -  -      208 


861358 


PRE  FACE. 


The  object  in  preparing  this  volume  was  to  collect  and  present  in  a 
form  convenient  for  reference  and  preservation,  information  calculated 
to  throw  light  on  the  intent  and  meaning  of  the  "  Act  to  Regulate  Com- 
merce," otherwise  known  as  the  Inter-state  Commerce  law,  which  went 
into  effect  April  5,  1887.  No  congressional  enactment,  probably,  has 
ever  called  out  such  widely  differing  interpretations,  while  none  has 
ever  before  undertaken  so  directly  to  regulate  and  govern  business  and 
financial  interests  of  such  vast  magnitude.  The  importance,  therefore, 
of  a  clear  understanding  as  to  what  the  framers  of  this  law  actually  in- 
tended is  exceedingly  great. 

The  subject  of  national  regulation  of  common  carriers,  which  had 
been  under  active  discussion  at  frequent  intervals  in  Congress,  as  well  as 
in  the  State  legislatures  and  through  the  public  press  for  years,  took  def- 
inite form  during  1886  in  the  passage  by  the  Senate  of  what  is  known  as 
the  Cullom  bill,  May  12.  The  House  refused  to  concur  in  this  bill,  but 
on  July  30,  1886,  passed  what  is  known  as  the  Reagan  bill.  The  Senate 
failing  to  concur,  a  conference  committee  was  appointed  by  each  body, 
and  the  result  of  their  deliberations  was  the  "Act  to  Regulate  Com- 
merce," which  was  finally  passed  by  the  Senate  January  14,  1887,  and 
by  the  House  January  21,  was  approved  by  the  President  February  4, 
and  went  into  effect  April  5,  1887.  The  three  bills  referred  to  are  repro- 
duced in  this  volume,  and  from  the  mass  of  material  contained  in  the 
extended  debates  in  both  houses  of  Congress  previous  to  the  passage  of 
the  existing  law  there  have  been  selected  the  following:  The  remarks 
of  Senator  Cullom,  December  15,  1886,  and  January  10  and  14,  1887, 
explanatory  of  the  various  provisions  of  the  act;  the  remarks  of  Senator 
Wilson,  as  representing  the  western  and  so-called  "  granger  "  feeling  in 
favor  of  stringent  railway  legislation;  the  remarks  of  Senator  Piatt,  of 
Connecticut,  favoring  the  proposed  bill  with  the  exception  of  the  clause 
prohibiting  pooling,  and  in  this  speech  giving  an  elaborate  argument, 
strongly  fortified  by  citations  from  other  authorities,  in  defense  of  the 
pooling  system;  the  remarks  of  Senator  Stanford,  of  California,  oppos- 
ing entirely  the  principle  and  form  of  the  proposed  legislation,  and  the 
remarks  of  Mr.  Crisp,  of  Georgia,  in  the  House,  as  representing  the 
views  of  Mr.  Reagan  and  other  extreme  advocates  of  national  control  of 
the  railways.     Mr.  Crisp's  speech  embodies  the  statement  of  the  con- 


6  INTER- STATE    COMMERCE    LAW. 

ferees  on  the  part  of  the  house,  Messrs.  Reagan,  Crisp  and  Weaver,  and 
Is  a  strong  statemenl  of  the  arguments  in  opposition  to  pooling  and  in 
defense  of  the  long  and  short  haul  clause  and  other  provisions  of  the 
law  as  it  now  stand-.  As  presenting  some  of  the  objections  of  business 
interests  to  the  proposed  bill,  there  is  given  the  protest  of  the  Minneap- 
olis Board  of  Trade,  presented  to  Congress  just  before  the  passage  of 
the  law. 

on  as  the  law  was  put  in  force,  the  uncertainty  and  confusion 
in  the  public  mind  in  regard  to  the  actual  intent  and  meaning  of  its  pro- 
visions continued  to  find  expression,  and  the  views  of  railway  officials 
and  associations  were  anxiously  sought  for.  As  an  example  of  the  inter- 
pretations rendered,  there  are  given  in  this  work  papers  by  Mr.  Albert 
Fink,  Commissioner  of  the  Trunk  Lines;  by  Mr.  George  R.  Blanchard, 
Commissioner  of  the  Centred  Traffic  Association,  and  by  President 
Alexander,  of  the  Georgia  Central  Railroad  Company;  followed  by  offi- 
cial interpretations  of  the  law,  as  its  meaning  was  understood,  by  the 
joint  committee  of  general  passenger  agents  of  the  Trunk  Lines  and 
their  immediate  connections;  by  the  Western  Passenger  Association;  by 
the  Southern  Passenger  Association,  and  by  the  managers  of  New  Eng- 
land railroads  in  convention. 

-  soon  as  the  Inter-state  Commerce  commission  was  appointed  and 
commenced  work,  it  was  confronted  with  numerous  petitions  from  rail- 
way companies  and  individuals  for  a  suspension  of  the  provisions  of  the 
fourth  -eel  ion  of  the  act,  concerning  the  charges  for  long  and  short 
hauls.  The  difficulties  in  the  way  of  the  enforcement  of  this  section  are 
set  forth  xery  clearly  in  the  argument  made  before  the  commission  by 
Mr.  Milton  H.  Smith,  on  behalf  of  the  Southern  Railway  &  Steamship 
Asa  ciation.  This  is  followed  by  the  first  official  order  of  the  Inter-state 
Commerce  commission,  suspending  the  provisions  of' section  4  for  the 
railways  in  that  association  in  accordance  with  the  petition.  There  is 
also  given  a  record  of  subsequent  action  by  the  commission  in  declining 
certain  other  petitions  and  accompanying  its  action  with  a  severe  admoni- 
tion to  the  railways  ;  and  its  ruling  on  April  23,  suspending  the  enforce- 
ment of  the  fourth  section  in  the  case  of  the  transcontinental  railways. 
From  a  study  of  this  mass  of  varied  information,  those  interested  in 
an  understanding  of  the  Inter-state  Commerce  law  will  obtain  some  help, 
while  waiting  for  that  full  light  in  regard  to  the  merits  and  defects  of  the 
law  which  can  only  be  obtained  from  experience  of  its  practical  working. 

The  Editors. 
Office  of  The  Railway  Age, 

'ago,  May  1.  188*3 


ORGANIZATION  OF  THE    INTERSTATE    COM- 
MERCE COMMISSION. 


On  March  22,  1887,  President  Cleveland  announced  the  appoint- 
ment of  the  members  of  the  interstate  commerce  commission,  as  follows: 

Thomas  M.  Cooley,  of  Michigan,  for  the  term  of  six  years. 

William  R.  Morrison,  of  Illinois,  for  the  term  of  five  years. 

Augustus  Schoonmaker,  of  New  York,  for  the  term  of  four  years. 

Aldace  F.  Walker,  of  Vermont,  for  the  term  of  three  years. 

Walter  L.  Bragg,  of  Alabama,  for  the  term  of  two  years. 

The  commission  held  its  first  session  at  Washington,  D.  C,  April 
1,  1887,  and  organized  by  electing  Judge  Cooley  as  chairman. 

Mr.  Edgar  A.  Mosely,  of  Newburyport,  Mass.,  was  subsequently 
elected  secretary. 

Sketch  of  the  Lives  of  the  Commissioners. 

Judge  Thomas  M.  Cooley  was  born  in  Attica,  N.  Y.,  January  6, 
1824.  He  removed  to  Michigan  in  1843,  and  was  admitted  to  the  bar  at 
Adrian  in  1846,  where  he  settled  permanently  in  1848.  In  1857  he  was 
appointed  to  compile  the  statutes  of  Michigan,  which  wTere  published  in 
two  volumes.  He  was  reporter  of  the  Michigan  Supreme  Court  1858  to 
1864,  and  published  eight  volumes  of  reports.  In  1850  he  became  Jay 
Professor  of  Law  in  the  University  of  Michigan  at  Ann  Arbor,  and  held 
the  position  for  many  }rears.  In  1864  he  was  elected  a  Justice  of  the 
Michigan  Supreme  Court,  continuing  on  the  bench  20  years,  but  was 
defeated  for  re-election  in  1885.  He  has  published  a  "Digest of  Michigan 
Reports"  (1866)  and  a  "Treatise  on  Constitutional  Limitations  of  the 
Legislative  Power  of  the  States"  (1868),  on  which  latter  work  largely 
rests  his  fame  as  a  jurist.  Several  years  ago  he  served  with  E.  B. 
Washburne  and  Allen  G.  Thurman  as  an  Advisory  Commission  to  settle 
trunk-line  disputes,  becoming  sole  arbitrator  on  the  withdrawal  of  his 
fellow-commissioners.  He  wTas  appointed  receiver  of  the  Wabash  railway 
lines,  east  of  the  Mississippi  river,  in  December,  1886,  resigning  to  accept 
the  position  which  he  now  holds. 

William  R.  Morrison,  of  Waterloo,  111.,  was  born  in  Monroe 
County,  that  State,  September  24,  1825.  He  was  reared  on  a  farm,  and 
after  receiving  a  common-school  education  was  for  some  time  a  student 
at  McKendree  College.  He  served  in  the  Mexican  wTar  as  a  private. 
From  1852  to  1854  he  was  clerk  of  the  Circuit  Court  of  Monroe 
County.      In  1855  he  was  admitted  to  the  bar,  and  began  practice  at 


8  INTER -STATE    COMMERCE    LAW. 

Waterloo,  where  he  has  since  made  his  home.  From  1854  to  1860  he 
^.was  a  mfcmber!  o?  the  Illinois  House  of  Representatives,  serving  as 
Speaker  tlic  la  -t  iwo  years.  During  the  civil  war  he  served  in  the  Union 
army  as  colonel  of  49th  Illinois  Regiment,  which  he  commanded  at  Fort 
IX'nV'Wn,'  where  'h6  was1  severely  wounded.  He  was  elected  to  the 
XX XVII i th  Congress.  In  1864  he  was  defeated  for  reelection  and. 
again  in  1866.  In  1870  and  1871  he  again  served  in  the  Legislature.  In 
1872  he  was  elected  to  the  XLIIId  Congress  and  served  continuously 
until  March  3,  1887.  He  was  defeated  for  re-election  by  Jehu  Baker 
(Rep.),  who  had  defeated  him  in  1864  and  1866.  For  three  terms  Mr. 
Morrison  was  chairman  of  the  committee  on  Ways  and  Means.  In  this 
position  and  others  of  importance  in  congress  he  has  been  a  hard  worker. 
He  is  bold  and  confident,  rarely  taking  advice  from  any  one.  He  has 
taken  a  prominent  part  in  important  legislation,  but  is  best  known  to  the 
country  for  his  persistent  attacks  upon  the  tariff  system. 

Augustus  Schoonmaker,  of  Kingston,  X.  Y.,  was  born  in  Ulster 
County,  that  State,  in  1828.  He  was  admitted  to  the  bar  in  1853.  In 
1863  he  was  elected  County  Judge,  in  1875  a  member  of  the  State  Senate, 
and  in  1877  Attorney-General.  He  was  the  Democratic  candidate  for 
Court  of  Appeals  Judge  in  1881,  but  was  defeated.  He  became  a  mem- 
ber of  the  State  Civil-Service  Commission  in  1883,  being  appointed  by 
Gov.  Cleveland,  and  is  still  a  member  of  that  bod}'. 

Aldace  F.  Walker,  of  Rutland,  Vt,,  was  born  in  that  city  about 
forty-six  years  ago.  He  studied  law  in  the  office  of  U.  S.  Senator 
Edmunds  at  Burlington,  and  was  admitted  to  the  bar,  but  before  he  had 
a  chance  to  engage  in  practice  the  War  of  the  Rebellion  broke  out.  He 
went  to  the  front  as  a  private  and  came  out  a  Colonel.  He  has  been  a 
member  of  the  Legislature,  and  while  State  Senator  was  instrumental  in 
the  railroad  legislation  enacted.  In  polities  Mr.  Walker  has  always  been 
a  Republican. 

Capt.  Walter  L.  Bragg,  of  Montgomery,  Ala.,  was  born  in 
Lowndes  County,  Alabama,  February  25,  1838.  lie  received  a  liberal 
education  in  Arkansas  and  at  Harvard.  He  lived  in  Camden,  Ark., 
where  he  entered  on  the  practice  of  law.  He  served  in  the  Confederate 
army  through  the  war,  and  on  its  close  settled  in  Marion,  Ala., 
moving  to  Montgomery  in  1871.  He  was  chairman  of  the  Democratic 
State  Executive  Committee  in  l874-'75-'76.  In  1876  he  was  appointed 
Alabama's  member  of  the  National  Democratic  Committee  when  the 
convention  met  in  St.  Louis.  In  1880  he  was  Elector  for  the  State  at- 
Large  for  Hancock  and  English.  In  March,  1881.  he  was  appointed 
President  of  the  Alabama  Railroad  Commission,  and  was  re-appointed 
in  1883,  his  term  expiring  in  March,  1885.  Since  that  time  he  has  prac- 
ticed law  in  Montgomery. 


The  Inter-State  Commerce  Law< 


An  Act  to  Regulate  Commerce. 


APPLICATION    OF    THE    ACT. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the   United  States  of  America  in  Congress  assembled, 

That  the  provisions  of  this  act  shall  apply  to  any  common 
carrier  or  carriers  engaged  in  the  transportation  of  passengers 
or  property  wholly  by  railroad,  or  partly  by  railroad  and  partly 
by  water,  when  both  are  used,  under  a  common  control,  manage- 
ment, or  arrangement,  for  a  continuous  carriage  or  shipment, 
from  one  State  or  Territory  of  the  United  States,  or  the  Dis- 
trict of  Columbia,  to  any  other  State  or  Territory  of  the  United 
States,  or  the  District  of  Columbia,  or  from  any  place  in  the 
United  States  to  an  adjacent  foreign  country,  or  from  any  place 
in  the  United  States  through  a  foreign  country  to  any  other 
place  in  the  United  States,  and  also  to  the  transportation  in 
like  manner  of  property  shipped  from  any  place  in  the  United 
States  to  a  foreign  country  and  carried  from  such  place  to  a 
port  of  trans-shipment,  or  shipped  from  a  foreign  country  to 
any  place  in  the  United  States  and  carried  to  such  place  from  a 
port  of  entry  either  in  the  United  States  or  an  adjacent  foreign 
country:  Provided,  however,  that  the  provisions  of  this  act 
shall  not  apply  to  the  transportation  of  passengers  or  property, 
or  to  the  receiving,  delivering,  storage,  or  handling  of  property, 
wholly  within  one  State,  and  not  shipped  to  or  from  a  foreign 
country  from  or  to  any  State  or  Territory  as  aforesaid. 

The  term  "railroad"  as  used  in  this  act  shall  include  all 
bridges  and  ferries  used  or  operated  in  connection  with  any 
railroad,  and  also  all  the  road  in  use  by  any  corporation,  oper- 
ating a  railroad,  whether  owned  or  operated  under  a  contract, 
agreement,  or  lease;  and  the  term  "transportation"  shall  in- 
clude all  instrumentalities  of  shipment  or  carriage. 

9 


10  INTER -STATE    COMMERCE    LAW. 

All  charges  made  for  any  service  rendered  or  to  be  rendered 
in  the  transportation  of  passengers  or  property  as  aforesaid,  or 
in  connection  therewith,  or  for  the  receiving,  delivering,  stor- 
age, or  handling  of  such  property,  shall  be  reasonable  and  just; 
and  every  unjust  and  unreasonable  charge  for  such  service  is 
prohibited  and  declared  to  be  unlawful. 

DISCRIMINATION. 

Sec.  2.  That  if  any  common  carrier  subject  to  the  provis- 
ions of  this  act  shall,  directly  or  indirectly,  by  any  special  rate, 
rebate,  drawback  or  other  device,  charge,  demand,  collect,  or 
receive  from  any  person  or  persons  a  greater  or  less  compensa- 
tion for  any  service  rendered,  or  to  be  rendered,  in  the  trans- 
portation of  passengers  or  property  subject  to  the  provisions  of 
this  act,  than  it  charges,  demands,  collects,  or  receives  from  any 
other  person  or  persons  for  doing  for  him  or  them  a  like  and 
contemporaneous  service  in  the  transportation  of  a  like  kind  of 
traffic  under  substantially  similar  circumstances  and  conditions, 
such  common  carrier  shall  be  deemed  guilty  of  unjust  discrimi- 
nation, which  is  hereby  prohibited  and  declared  to  be  unlawful, 

EQUAL    FACILITIES. 

Sec.  3.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  make  or  give  any  undue 
or  unreasonable  preference  or  advantage  to  any  particular  per- 
son, company,  firm,  corporation,  or  locality,  or  any  particular 
description  of  traffic,  in  any  respect  whatsoever,  or  to  subject 
any  particular  person,  company,  firm,  corporation,  or  locality, 
or  any  particular  description  of  traffic,  to  any  undue  or  unrea- 
sonable prejudice  or  disadvantage  in  any  respect  whatsoever. 

Every  cotnmon  carrier  subject  to  the  provisions  of  this  act 
shall,  according  to  their  respective  powers,  afford  all  reasonable, 
proper,  and  equal  facilities  for  the  interchange  of  traffic  between 
their  respective  lines  and  for  the  receiving,  forwarding,  and  de- 
livering of  passengers  and  property  to  and  from  their  several 
lines  and  those  connecting  therewith,  and  shall  not  discriminate 
in  their  rates  and  charges  between  such  connecting  lines;  but 
this  shall  not  be  construed  as  requiring  any  such  common  car- 
rier to  give  the  use  of  its  track  or  terminal  facilities  to  another 
carrier  engaged  in  like  business. 


INTER -STATE    COMMERCE    LAW.  11 

LONG    AND    SHORT    HAULS. 

Sec.  4.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  charge  or  receive  any 
greater  compensation  in  the  aggregate  for  the  transportation  of 
passengers  or  of  like  kind  of  property,  under  substantially 
similar  circumstances  and  conditions,  for  a  shorter  than  for  a 
longer  distance  over  the  same  line,  in  the  same  direction,  the 
shorter  being  included  within  the  longer  distance;  but  this 
shall  not  be  construed  as  authorizing  any  common  carrier  within 
the  terms  of  this  act  to  charge  and  receive  as  great  compensa- 
tion for  a  shorter  as  for  a  longer  distance;  provided,  however, 
that  upon  application  to  the  commission  appointed  under  the 
provisions  of  this  act,  such  common  carrier  may,  in  special 
cases,  after  investigation  by  the  commission  be  authorized  to 
charge  less  for  longer  than  for  shorter  distances  for  transporta- 
tion of  passengers  or  property;  and  the  commission  may  from 
time  to  time  prescribe  the  extent  to  which  said  designated  com- 
mon carrier  may  be  relieved  from  the  operation  of  this  section 
of  this  act. 

POOLS. 

Sec.  5.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  enter  into  any  contract, 
agreement,  or  combination  with  any  other  common  carrier  or 
carriers  for  the  pooling  of  freights  of  different  and  competing 
railroads,  or  to  divide  between  them  the  aggregate  or  net  pro- 
ceeds of  the  earnings  of  such  railroads,  or  any  portion  thereof; 
and  in  any  case  of  an  agreement  for  the  pooling  of  freights  as 
aforesaid,  each  day  of  its  continuance  shall  be  deemed  a  sepa- 
rate offense. 

RATES — PUBLICATION. 

Sec.  6.  That  every  common  carrier  subject  to  the  provisions 
of  this  act  shall  print  and  keep  for  public  inspection  schedules 
showing  the  rates  and  fares  and  charges  for  the  transportation 
of  passengers  and  property  which  any  such  common  carrier  has 
established  and  which  are  in  force  at  the  time  upon  its  railroad, 
as  defined  by  the  first  section  of  this  act.  The  schedules 
printed  as  aforesaid  by  any  such  common  carrier  shall  plainly 
state  the  places  upon  its  railroad  between  which  property  and 
passengers  will  be  carried,  and  shall  contain  the  classification 
of  freight  in  force  upon  such  railroad,  and  shall  also  state  sep- 


12  INTER -STATE    COMMERCE    LAW. 

arately  the  terminal  charges  and  any  rules  or  regulations  which 
in  any  wise  change,  affect,  or  determine  any  part  of  the  aggre- 
gate of  such  aforesaid  rates  and  fares  and  charges.  Such 
schedules  shall  be  plainly  printed  in  large  type,  of  at  least  the 
size  of  ordinary  pica,  and  copies  for  the  use  of  the  public  shall 
be  kept  in  every  depot  or  station  upon  any  such  railroad,  in 
such  places  and  in  such  form  that  they  can  be  conveniently 
inspected. 

Any  common  carrier  subject  to  the  provisions  of  this  act  re- 
ceiving freight  in  the  United  States  to  be  carried  through  a 
foreign  country  to  any  place  in  the  United  States  shall  also  in 
like  manner  print  and  keep  for  public  inspection,  at  every 
depot  where  such  freight  is  received  for  shipment,  schedules 
showing  the  through  rates  established  and  charged  by  such 
common  carrier  to  all  points  in  the  United  States  beyond  the 
foreign  country  to  which  it  accepts  freight  for  shipment;  and 
any  freight  shipped  from  the  United  States  through  a  foreign 
country  into  the  United  States,  the  through  rate  on  which  shall 
not  have  been  made  public  as  required  by  this  act,  shall,  before 
it  is  admitted  into  the  United  States  from  said  foreign  country, 
be  subject  to  customs  duties,  as  if  said  freight  were  of  foreign 
production;  and  any  law  in  conflict  with  this  section  is  hereby 
repealed. 

No  advance  shall  be  made  in  the  rates,  fares,  and  charges 
which  have  been  established  and  published  as  aforesaid  by  any 
common  carrier,  in  compliance  with  the  requirements  of  this 
section,  except  after  ten  days'  public  notice,  which  shall  plainly 
state  the  changes  proposed  to  be  made  in  the  schedule  then  in 
force,  and  the  time  when  the  increased  rates,  fares,  or  charges 
will  go  into  effect;  and  the  proposed  changes  shall  be  shown  by 
printing  new  schedules,  or  shall  be  plainly  indicated  upon  the 
schedules  in  force  at  the  time  and  kept  for  public  inspection. 
Reductions  in  such  published  rates,  fares,  or  charges  may  be 
made  without  previous  public  notice;  but  whenever  any  such 
reduction  is  made,  notice  of  the  same  shall  immediately  be 
publicly  posted  and  the  changes  made  shall  immediately  be 
made  public  by  printing  new  schedules,  or  shall  immediately 
be  plainly  indicated  upon  the  schedules  at  the  time  in  force  and 
kept  for  public  inspection. 

And  when  any  such  common  carrier  shall  have  established 
and  published  its  rates,  fares,  and  charges,  in  compliance  with 
the  provisions  of  this  section,  it  shall  be  unlawful  for  such  com- 


INTER- STATE    COMMERCE    LAW.  13 

mon  carrier  to  charge,  demand,  collect,  or  receive  from  any 
person  or  persons  a  greater  or  less  compensation  for  the  trans- 
portation of  passengers  or  property,  or  for  any  services  in  con- 
nection therewith,  than  is  specified  in  such  published  schedule 
of  rates,  fares,  and  charges  as  may  at  the  time  be  in  force. 

Every  common  carrier  subject  to  the  provisions  of  this  act 
shall  file  with  the  commission  hereinafter  provided  for  copies  of 
its  schedules  of  rates,  fares,  and  charges  which  have  been  estab- 
lished and  published  in  compliance  with  the  requirements  of 
this  section,  and  shall  promptly  notify  said  commission  of  all 
changes  made  in  the  same.  Every  such  common  carrier  shall 
also  file  with  said  commission  copies  of  all  contracts,  agree- 
ments, or  arrangements  with  other  common  carriers  in  relation 
to  any  traffic  affected  by  the  provisions  of  this  act  to  which  it 
may  be  a  party.  And  in  cases  where  passengers  and  freight 
pass  over  continuous  lines  or  routes  operated  by  more  than  one 
common  carrier,  and  the  several  common  carriers  operating 
such  lines  or  routes  establish  joint  tariffs  of  rates  or  fares,  or 
charges  for  such  continuous  lines  or  routes,  copies  of  such  joint 
tariffs  shall  also,  in  like  manner,  be  filed  with  said  commission. 
Such  joint  rates,  fares,  and  charges  on  such  continuous  lines  so 
filed  as  aforesaid,  shall  be  made  public  by  such  common  carriers 
when  directed  by  said  commission,  in  so  far  as  may,  in  the  judg- 
ment of  the  commission,  be  deemed  practicable;  and  said 
commission  shall  from  time  to  time  prescribe  the  measure  of 
publicity  which  shall  be  given  to  such  rates,  fares,  and  charges, 
or  to  such  part  of  them  as  it  may  deem  it  practicable  for  such 
common  carriers  to  publish,  and  the  places  in  which  they  shall 
be  published;  but  no  common  carrier,  party  to  any  such  joint 
tariff,  shall  be  liable  for  the  failure  of  any  other  common  carrier 
party  thereto  to  observe  and  adhere  to  the  rates,  fares,  or  charges 
thus  made  and  published. 

If  arfy  such  common  carrier  shall  neglect  or  refuse  to  file  or 
publish  its  schedules  or  tariffs  of  rates,  fares,  and  charges  as 
provided  in  this  section,  or  any  part  of  the  same,  such  common 
carrier  shall,  in  addition  to  other  penalties  herein  prescribed,  be 
subject  to  a  writ  of  mandamus,  to  be  issued  by  any  circuit 
court  of  the  United  States  in  the  Judicial  District  wherein  the 
principal  office  of  said  common  carrier  is  situated  or  wherein 
such  offense  may  be  committed,  and  if  such  common  carrier  be 
a  foreign  corporation,  in  the  judicial  circuit  wherein  such  com- 
mon carrier  accepts  traffic  and  has  an  agent  to  perform  such 


14  INTER -STATE    COMMERCE    LAW. 

service,  to  compel  compliance  with  the  aforesaid  provisions  of 
this  section;  and  such  writ  shall  issue  in  the  name  of  the  people 
of  the  United  States,  at  the  relation  of  the  Commissioners  ap- 
pointed under  the  provisions  of  this  act;  and  failure  to  comply 
with  its  requirements  shall  be  punishable  as  and  for  a  contempt: 
and  the  said  Commissioners,  as  complainants,  may  also  apply, 
in  any  such  Circuit  Court  of  the  United  States,  for  a  writ  of 
injunction  against  such  common  carrier,  to  restrain  such  com- 
mon carrier  from  receiving  or  transporting  property  among  the 
several  States  and  Territories  of  the  United  States,  or  between 
the  United  States  and  adjacent  foreign  countries,  or  between 
ports  of  trans-shipment  and  of  entry  and  the  several  States  and 
Territories  of  the  United  States,  as  mentioned  in  the  first  sec- 
tion of  this  act,  until  such  common  carrier  shall  have  complied 
with  the  aforesaid  provisions  of  this  section  of  this  act. 

CONTINUOUS    CARRIAGE. 

Sec.  7.  That  it  shall  be  unlawful  for  any  common  carrier 
subject  to  the  provisions  of  this  act  to  enter  into  any  combina- 
tion, contract,  or  agreement,  expressed  or  implied,  to  prevent, 
by  change  of  time  schedule,  carriage  in  different  cars,  or  by 
any  other  means  or  devices,  the  carriage  of  freights  from  being 
continuous  from  the  place  of  shipment  to  the  place  of  destina- 
tion; and  no  break  of  bulk,  stoppage,  or  interruption  made  by 
such  common  carrier  shall  prevent  the  carriage  of  freights  from 
being  and  being  treated  as  one  continuous  carriage  from  the 
place  of  shipment  to  the  place  of  destination,  unless  such  break, 
stoppage,  or  interruption  was  made  in  good  faith  for  some  nec- 
essary purpose,  and  without  any  intent  to  avoid  or  unneces- 
sarily interrupt  such  continuous  carriage  or  to  evade  any  of  the 
provisions  of  this  act. 

LIABILITY    OF    CARRIERS. 

Sec.  8.  That  in  case  any  common  carrier  subject  to  the 
provisions  of  this  act  shall  do,  cause  to  be  done,  or  permit  to  be 
done  any  act,  matter,  or  thing  in  this  act  prohibited  or  declared 
to  be  unlawful,  or  shall  omit  to  do  any  act,  matter,  or  thing  in 
this  act  required  to  be  done,  such  common  carrier  shall  be  liable 
to  the  person  or  persons  injured  thereby  for  the  full  amount  of 
damages  sustained  in  consequence  of  any  such  violation  of  the 
provisions  of  this  act,  together  with  a  reasonable  counsel  or 
attorney's  fee,  to  be  fixed  by  the  court  in  every  case  of  recov- 
ery, which  attorney's  fee  shall  be  taxed  and  collected  as  part  of 
the  costs  in  the  case. 


INTER -STATE    COMMERCE    LAW.  15 

ACTION    FOR    DAMAGES. 

Sec.  9.  That  any  person  or  persons  claiming  to  be  dam- 
aged by  any  common  carrier  subject  to  the  provisions  of  this 
act  may  either  make  complaint  to  the  Commission  as  hereinafter 
provided  for,  or  may  bring  suit  in  his  or  their  own  behalf  for 
the  recovery  of  the  damages  for  which  such  common  carrier 
may  be  liable  under  the  provisions  of  this  act  in  any  District  or 
Circuit  Court  of  the  United  States  of  competent  jurisdiction; 
but  such  person  or  persons  shall  not  have  the  right  to  pursue 
both  of  said  remedies,  and  must  in  each  case  elect  which  one 
of  the  two  methods  of  procedure  herein  provided  for  he  or 
they  will  adopt.  In  any  such  action  brought  for  the  recovery 
of  damages  the  court  before  which  the  same  shall  be  pending 
may  compel  any  director,  officer,  receiver,  trustee,  or  agent  of 
the  corporation  or  company  defendant  in  such  suit  to  attend, 
appear,  and  testify  in  such  case,  and  may  compel  the  produc- 
tion of  the  books  and  papers  of  such  corporation  or  company 
party  to  such  suit;  the  claim  that  any  such  testimony  or  evidence 
may  tend  to  criminate  the  person  giving  such  evidence  shall 
not  excuse  such  witness  from  testifying,  but  such  evidence  or 
testimony  shall  not  be  used  against  such  person  on  the  trial  of 
any  criminal  proceeding. 

PENALTIES    FOR    VIOLATION. 

Sec.  i  o..  That  any  common  carrier  subject  to  the  provisions 
of  this  act,  or,  whenever  such  common  carrier  is  a  corporation, 
any  director  or  officer  thereof,  or  any  receiver,  trustee,  lessee, 
agent,  or  person  acting  for  or  employed  by  such  corporation, 
who,  alone  or  with  any  other  corporation,  company,  person,  or 
party,  shall  willfully  do  or  cause  to  be  done,  or  shall  willingly 
suffer  or  permit  to  be  done,  any  act,  matter,  or  thing  in  this  act 
prohibited  or  declared  to  be  unlawful,  or  who  shall  aid  or  abet 
therein,  or  shall  willfully  omit  or  fail  to  do  any  act,  matter,  or 
thing  in  this  act  required  to  be  done,  or  shall  cause  or  willingly 
suffer  or  permit  any  act,  matter,  or  thing  so  directed  or  required 
by  this  act  to  be  done  not  to  be  so  done,  or  shall  aid  or  abet 
any  such  omission  or  failure,  or  shall  be  guilty  of  any  infraction 
of  this  act,  or  shall  aid  or  abet  therein,  shall  be  deemed  guilty 
of  a  misdemeanor,  and  shall,  upon  conviction  thereof  in  any 
district  court  of  the  United  States  within  the  jurisdiction  of 
which  such  offense  was  committed,  be  subject  to  a  fine  of  not 
to  exceed  five  thousand  dollars  for  each  offense. 


18  INTER-STATE    COMMERCE    LAW. 

THE    COMMISSION. 

Sec.  ii.  That  a  commission  is  hereby  created  and  estab- 
lished to  be  known  as  the  Inter- State  Commerce  Commission, 
which  shall  be  composed  of  five  Commissioners,  who  shall  be 
appointed  by  the  President,  by  and  with  the  advice  and  consent 
of  the  Senate.  The  Commissioners  first  appointed  under  this 
act  shall  continue  in  office  for  the  term  of  two,  three,  four,  five, 
and  six  years  respectively,  from  the  first  day  of  January,  anno 
Domini,  eighteen  hundred  and  eighty-seven,  the  term  of  each 
to  be  designated  by  the  President;  but  their  successors  shall  be 
appointed  for  terms  of  six  years,  except  that  any  person  chosen 
to  fill  a  vacancy  shall  be  appointed  only  for  the  unexpired  term 
of  the  Commissioner  whom  he  shall  succeed.  Any  Commis- 
sioner may  be  removed  by  the  President  for  inefficiency,  neg- 
lect of  duty,  or  malfeasance  in  office.  Not  more  than  three  of 
the  Commissioners  shall  be  appointed  from  the  same  political 
party.  No  person  in  the  employ  of  or  holding  any  official  re- 
lation to  any  common  carrier  subject  to  the  provisions  of  this 
act,  or  owning  stock  or  bonds  thereof,  or  who  is  in  any  manner 
pecuniarily  interested  therein,  shall  enter  upon  the  duties  of  or 
hold  such  office.  Said  Commissioners  shall  not  engage  in  any 
other  business,  vocation,  or  employment.  No  vacancy  in  the 
Commission  shall  impair  the  right  of  the  remaining  Commis- 
sioners to  exercise  all  the  powers  of  the  Commission. 

POWERS    OF    COMMISSION. 

Sec.  12.  That  the  Commission  hereby  created  shall  have 
authority  to  inquire  into  the  management  of  the  business  of  all 
common  carriers  subject  to  the  provisions  of  this  act,  and  shall 
keep  itself  informed  as  to  the  manner  and  method  in  which  the 
same  is  conducted,  and  shall  have  the  right  to  obtain  from  such 
common  carriers  full  and  complete  information  necessary  to 
enable  the  Commission  to  perform  the  duties  and  carry  out  the 
objects  for  which  it  was  created;  and  for  the  purposes  of  this 
act  the  Commission  shall  have  power  to  require  the  attendance 
and  testimony  of  witnesses  and  the  production  of  all  books, 
papers,  tariffs,  contracts,  agreements,  and  documents  relating  to 
any  matter  under  investigation,  and  to  that  end  may  invoke 
the  aid  of  any  court  of  the  United  States  in  requiring  the  at- 
tendance and  testimony  of  witnesses  and  the  production  of 
books,  papers,  and  documents  under  the  provisions  of  this 
section. 


INTER. STATE    COMMERCE    LAW.  17 

And  any  of  the  circuit  courts  of  the  United  States  within  the 
jurisdiction  of  which  such  inquiry  is  carried  on  ma)7,  in  case  of 
contumacy  or  refusal  to  obey  a  subpoena  issued  to  any  common 
carrier  subject  to  the  provisions  of  this  act,  or  other  person, 
issue  an  order  requiring  such  common  carrier  or  other  person 
to  appear  before  said  Commission  (and  produce  books  and 
papers  if  so  ordered)  and  give  evidence  touching  the  matter  in 
question;  and  any  failure  to  obey  such  order  of  the  court  may 
be  punished  by  such  court  as  a  contempt  thereof.  The  claim 
that  any  such  testimony  or  evidence  may  tend  to  criminate  the 
person  giving  such  evidence  shall  not  excuse  such  witness  from 
testifying;  but  such  evidence  or  testimony  shall  not  be  used 
against  such  person  on  the  trial  of  any  criminal  proceeding. 

COMPLAINTS    TO    COMMISSION. 

Sec.  13.  That  any  person,  firm,  corporation,  or  association, 
or  any  mercantile,  agricultural,  or  manufacturing  society,  or 
any  body  politic  or  municipal  organization,  complaining  of  any- 
thing done  or  omitted  to  be  done  by  any  common  carrier  subject 
to  the  provisions  of  this  act,  in  contravention  of  the  provisions 
thereof,  may  apply  to  said  Commission  by  petition,  which  shall 
briefly  state  the  facts;  whereupon  a  statement  of  the  charges 
thus  made  shall  be  forwarded  by  the  Commission  to  such  com- 
mon carrier,  who  shall  be  called  upon  to  satisfy  the  complaint 
or  to  answer  the  same  in  writing  within  a  reasonable  time,  to  be 
specified  by  the  Commission.  If  such  common  carrier,  within 
the  time  specified,  shall  make  reparation  for  the  injury  alleged 
to  have  been  done,  said  carrier  shall  be  relieved  of  liability  to 
the  complainant  only  for  the  particular  violation  of  law  thus 
complained  of.  If  such  carrier  shall  not  satisfy  the  complaint 
within  the  time  specified,  or  there  shall  appear  to  be  any  reason- 
able ground  for  investigating  said  complaint,  it  shall  be  the 
duty  of  the  Commission  to  investigate  the  matters  complained 
of  in  such  manner  and  by  such  means  as  it  shall  deem  proper. 

Said  Commission  shall  in  like  manner  investigate  any 
complaint  forwarded  by  the  railroad  commissioner  or  railroad 
commission  of  any  State  or  Territory,  at  the  request  of  such 
commissioner  or  commission,  and  may  institute  any  inquiry  on 
its  own  motion  in  the  same  manner  and  to  the  same  effect  as 
though  complaint  had  been  made. 

No  complaint  shall  at  any  time  be  dismissed  because  of  the 
absence  of  direct  damage  to  the  complainant. 


is  INTER -STATE    COMMERCE    LAW. 


INVESTIGATION    OF    CHARGES. 

Sec.  14.  That  whenever  an  investigation  shall  be  made  by 
said  Commission,  it  shall  be  its  duty  to  make  a  report  in  writ- 
ing in  respect  thereto,  which  shall  include  the  findings  of  fact 
upon  which  the  conclusions  of  the  Commission  are  based,  to- 
gether with  its  recommendation  as  to  what  reparation,  if  any, 
should  be  made  by  the  common  carrier  to  any  party  or  parties 
who  may  be  found  to  have  been  injured  ;  and  such  findings  so 
made  shall  thereafter,  in  all  judicial  prooceedings,  be  deemed 
prima  facie  evidence  as  to  each  and  every  fact  found. 

All  reports  of  investigation  made  by  the  Commission  shall 
be  entered  of  record,  and  a  copy  thereof  shall  be  furnished  to 
the  party  who  may  have  complained,  and  to  any  common  car- 
rier that  may  have  been  complained  of. 

Sec.  15.  That  if  in  any  case  in  which  an  investigation  shall  be 
made  by  said  Commission  it  shall  be  made  to  appear  to  the 
satisfaction  of  the  Commission,  either  by  the  testimony  of  wit- 
nesses or  other  evidence,  that  anything  has  been  done  or  omit- 
ted to  be  done  in  violation  of  the  provisions  of  this  act,  or  of 
any  law  cognizable  by  said  Commission,  by  any  common  car- 
rier, or  that  any  injury  or  damage  has  been  sustained  by  the 
party  or  parties  complaining,  or  by  other  parties  aggrieved  in 
consequence  of  any  such  violation,  it  shall  be  the  duty  of  the 
Commission  to  forthwith  cause  a  copy  of  its  report  in  respect 
thereto  to  be  delivered  to  such  common  carrier,  together  with 
a  notice  to  said  common  carrier  to  cease  and  desist  from  such 
violation,  or  to  make  reparation  for  the  injury  so  found  to  have 
been  done,  or  both,  within  a  reasonable  time,  to  be  specified  by 
the  Commission  ;  and  if,  within  the  time  specified,  it  shall  be 
made  to  appear  to  the  Commission  that  such  common  carrier 
has  ceased  from  such  violation  of  law,  and  has  made  reparation 
for  the  injury  found  to  have  been  done,  in  compliance  with  the 
report  and  notice  of  the  Commission,  or  to  the  satisfaction  of 
the  party  complaining,  a  statement  to  that  effect  shall  be  entered 
of  record  by  the  Commission,  and  the  said  common  carrier 
shall  thereupon  be  relieved  from  further  liability  or  penalty  for 
such  particular  violation  of  law. 

PROCEEDINGS    IN    COURT. 

Sec.  16.  That  whenever  any  common  carrier,  as  defined  in 
and  subject  to  the  provisions  of  this  act,  shall  violate  or  refuse 
or  neglect  to  obey  any  lawful  order  or  requirement  of  the  Com- 


INTER -STATE    COMMERCE    LAW.  19 

mission  in  this  act  named,  it  shall  be  the  duty  of  the  Commis- 
sion, and  lawful  for  any  company  or  person  interested  in  such 
order  or  requirement,  to  apply,  in  a  summary  way,  by  petition, 
to  the  circuit  court  of  the  United  States  sitting  in  equity  in  the 
judicial  district  in  which  the  common  carrier  complained  of  has 
its  principal  office,  or  in  which  the  violation  or  disobedience  of 
such  order  or  requirement  shall  happen,  alleging  such  violation 
or  disobedience,  as  the  case  may  be ;  and  the  said  court  shall 
have  power  to  hear  and  determine  the  matter  on  such  short 
notice  to  the  common  carrier  complained  of  as  the  court  shall 
deem  reasonable  ;  and  such  notice  may  be  served  on  such  com- 
mon carrier,  his  or  its  officers,  agents,  or  servants,  in  such  man- 
ner as  the  court  may  direct ;  and  said  court  shall  proceed  to 
hear  and  determine  the  matter  speedily  as  a  court  of  equity, 
and  without  the  formal  pleadings  and  proceedings  applicable 
to  ordinary  suits  in  equity,  but  in  such  manner  as  to  do  justice 
in  the  premises  ;  and  to  this  end  such  court  shall  have  power, 
if  it  think  fit,  to  direct  and  prosecute,  in  such  mode  and  by 
such  persons  as  it  may  appoint,  all  such  inquiries  as  the  court 
may  think  needful  to  enable  it  to  form  a  just  judgment  in  the 
matter  of  such  petition  ;  and  on  such  hearing  the  report  of 
said  Commission  shall  be  prima  facie  evidence  of  the  matters 
therein  stated  ;  and  if  it  be  made  to  appear  to  such  court,  on 
on  such  hearing  or  on  report  of  any  such  person  or  persons, 
that  the  lawful  order  or  requirement  of  said  Commission  drawn 
in  question  has  been  violated  or  disobeyed,  it  shall  be  lawful 
for  such  court  to  issue  a  writ  of  injunction  or  other  proper  pro- 
cess, mandatory  or  otherwise,  to  restrain  such  common  carrier 
from  further  continuing  such  violation  or  disobedience  of  such 
order  or  requirement  of  said  Commission,  and  enjoining 
obedience  to  the  same  ;  and  in  case  of  any  disobedience  of  any 
such  writ  of  injunction  or  other  proper  process,  mandatory  or 
otherwise,  it  shall  be  lawful  for  such  court  to  issue  writs  of  at- 
tachment, or  any  other  process  of  said  court  incident  or  appli- 
cable to  writs  of  injunction  or  other  proper  process,  mandatory 
or  otherwise,  against  such  common  carrier,  and  if  a  corporation, 
against  one  or  more  of  the  directors,  officers,  or  agents  of  the 
same,  or  against  any  owner,  lessee,  trustee,  receiver,  or  other 
person  failing  to  obey  such  writ  of  injunction  or  other  proper 
process,  mandatory  or  otherwise  ;  and  said  court  may,  if  it 
shall  think  fit,  make  an  order  directing  such  common  carrier, 
or  other  person  so  disobeying  such  writ  of  injunction  or  other 


20  INTER -STATE    COMMERCE    LAW. 

proper  process,  mandatory  or  otherwise,  to  pay  such  sum  of 
money  not  exceeding  for  each  carrier  or  person  in  default  the 
sum  of  five  hundred  dollars  for  every  day  after  a  day  to  be 
named  in  the  order  that  such  carrier  or  other  person  shall  fail 
to  obey  such  injunction  or  other  proper  process,  mandatory  or 
otherwise  ;  and  such  moneys  shall  be  payable  as  the  court  shall 
diret,  either  to  the  party  complaining,  or  into  court  to  abide  the 
ultimate  decision  of  the  court,  or  into  the  Treasury  ;  and  pay- 
ment thereof  may,  without  prejudice  to  any  other  mode  of  re- 
covering the  same,  be  enforced  by  attachment  or  order  in  the 
nature  of  a  writ  of  execution,  in  like  manner  as  if  the  same 
had  been  recovered  by  a  final  decree  in  personam  in  such 
court.  When  the  subject  in  dispute  shall  be  of  the  value  of 
two  thousand  dollars  or  more,  either  party  to  such  proceeding 
before  said  court  may  appeal  to  the  Supreme  Court  of  the 
United  States,  under  the  same  regulations  now  provided  by  law 
in  respect  of  security  for  such  appeal ;  but  such  appeal  shall 
not  operate  to  stay  or  supersede  the  order  of  the  court  or  the 
execution  of  any  writ  or  process  thereon  ;  and  such  court  may, 
in  every  such  matter,  order  the  payment  of  such  costs  and 
counsel  fees  as  shall  be  deemed  reasonable.  Whenever  any 
such  petition  shall  be  filed  or  presented  by  the  Commission  it 
shall  be  the  duty  of  the  district  attorney,  under  the  direction 
of  the  Attorney-General  of  the  United  States,  to  prosecute  the 
same ;  and  the  costs  and  expenses  of  such  prosecution  shall  be 
paid  out  of  the  appropriation  for  the  expenses  of  the  courts  of 
the  United  States.  For  the  purposes  of  this  act,  excepting  its 
penal  provisions,  the  circuit  courts  of  the  United  States  shall 
be  deemed  to  be  always  in  session. 

Sec.  17.  That  the  Commission  may  conduct  its  proceed- 
ings in  such  manner  as  will  best  conduce  to  the  proper  dispatch 
of  business  and  to  the  ends  of  justice.  A  majority  of  the  Com- 
mission shall  constitute  a  quorum  for  the  transaction  of  busi- 
ness, but  no  Commissioner  shall  participate  in  any  hearing  or 
proceeding  in  which  he  has  any  pecuniary  interest.  Said  Com- 
mission may,  from  time  to  time,  make  or  amend  such  general 
rules  or  orders  as  may  be  requisite  for  the  order  and  regulation 
of  proceedings  before  it,  including  forms  of  notices  and  the 
service  thereof,  which  shall  conform,  as  nearly  as  may  be,  to 
those  in  use  in  the  courts  of  the  United  States.  Any  party 
may  appear  before  said  Commission  and  be  heard,  in  person  or 
bv  attorney.     Fivery  vote  and   official  act  of  the  Commission 


INTER- STATE    COMMERCE    LAW.  21 

shall  be  entered  of  record,  and  its  proceedings  shall  be  public 
upon  the  request  of  either  party  interested.  Said  Commission 
shall  have  an  official  seal,  which  shall  be  judicially  noticed. 
Either  of  the  members  of  .the  Commission  may  administer 
oaths  and  affirmations. 

PAY    OF    COMMISSION. 

Sec.  1 8.  That  each  Commissioner  shall  receive  an  annual 
salary  of  seven  thousand  five  hundred  dollars,  payable  in  the 
same  manner  as  the  salaries  of  judges  of  the  courts  of  the 
United  States.  The  Commission  shall  appoint  a  secretary,  who 
shall  receive  an  annual  salary  of  three  thousand  five  hundred 
dollars,  payable  in  like  manner.  The  Commission  shall  have 
authority  to  employ  and  fix  the  compensation  of  such  other 
employees  as  it  may  find  necessary  to  the  proper  performance 
of  its  duties,  subject  to  the  approval  of  the  Secretary  of  the 
Interior. 

The  Commission  shall  be  furnished  by  the  Secretary  of  the 
Interior  with  suitable  offices  and  all  necessary  office  supplies. 
Witnesses  summoned  before  the  Commission  shall  be  paid  the 
same  fees  and  mileage  that  are  paid  witnesses  in  the  courts  of 
the  United  States.  All  of  the  expenses  of  the  Commission,  in- 
cluding all  necessary  expenses  for  transportation  incurred  by 
the  Commissioners,  or  by  their  employees  under  their  orders, 
in  making  any  investigation  in  any  other  places  than  in  the  city 
of  Washington,  shall  be  allowed  and  paid  on  the  presentation 
of  itemized  vouchers  therefor,  approved  by  the  chairman  of  the 
Commission  and  Secretary  of  the  Interior. 

SITTINGS    OF    COMMISSION. 

Sec.  19.  That  the  principal  office  of  the  Commission  shall 
be  in  the  city  of  Washington,  where  its  general  sessions  shall 
be  held;  but  whenever  the  convenience  of  the  public  or  of  the 
parties  may  be  promoted  or  delay  or  expense  prevented  thereby, 
the  Commission  may  hold  special  sessions  in  any  part  of  the 
United  States.  It  may,  by  one  or  more  of  the  Commissioners, 
prosecute  any  inquiry  necessary  to  its  duties,  in  any  part  of  the 
United  States,  into  any  matter  or  question  of  fact  pertaining  to 
the  business  of  any  common  carrier  subject  to  the  provisions  of 
this  act. 

REPORTS    BY    CARRIERS. 

Sec.  20.  That  the  Commission  is  hereby  authorized  to  re- 
quire annual  reports  from  all  common  carriers  subject  to  the 


22  1XTER- STATE    COMMERCE    LAW. 

provisions  of  this  act,  to  fix  the  time  and  prescribe  the  manner 
in  which  such  reports  shall  be  made,  and  to  require  from  such 
carriers  specific  answers  to  all  questions  upon  which  the  Com- 
mission may  need  information.  Such  annual  reports  shall  show 
in  detail  the  amount  of  capital  stock  issued,  the  amounts  paid 
therefor,  and  the  manner  of  payment  for  the  same;  the  divi- 
dends paid,  the  surplus  fund,  if  any,  and  the  number  of  stock- 
holders; the  funded  and  floating  debts  and  the  interest  paid 
thereon;  the  cost  and  value  of  the  carrier's  property,  franchises, 
and  equipment;  the  number  of  employees  and  the  salaries  paid 
each  class;  the  amounts  expended  for  improvements  each  year, 
how  expended,  and  the  character  of  such  improvements;  the 
earnings  and  receipts  from  each  branch  of  business  and  from 
all  sources;  the  operating  and  other  expenses;  the  balances  of 
profit  and  loss;  and  a  complete  exhibit  of  the  financial  oper- 
ations of  the  carrier  each  year,  including  an  annual  balance- 
sheet.  Such  reports  shall  also  contain  such  information  in 
relation  to  rates  or  regulations  concerning  fares  or  freights,  or 
agreements,  arrangements,  or  contracts  with  other  common 
carriers,  as  the  Commission  may  require;  and  the  said  Commis- 
sion may,  within  its  discretion,  for  the  purpose  of  enabling  it 
the  better  to  carry  out  the  purposes  of  this  act,  prescribe  (if  in 
the  opinion  of  the  Commission  it  is  practicable  to  prescribe 
such  uniformity  and  methods  of  keeping  accounts)  a  period  of 
time  within  which  all  common  carriers  subject  to  the  provisions 
of  this  act  shall  have,  as  near  as  may  be,  a  uniform  system  of 
accounts,  and  the  manner  in  which  such  accounts  shall  be  kept. 

REPORTS    BY    COMMISSION. 

Sec.  21.  That  the  Commission  shall,  on  or  before  the  first 
day  of  December  in  each  year,  make  a  report  to  the  Secretary 
of  the  Interior,  which  shall  be  by  him  transmitted  to  Congress, 
and  copies  of  which  shall  be  distributed  as  are  the  other  reports 
issued  from  the  Interior  Department.  This  report  shall  con- 
tain such  information  and  data  collected  by  the  Commission  as 
may  be  considered  of  value  in  the  determination  of  questions 
connected  with  the  regulation  of  commerce,  together  with  such 
recommendations  as  to  additional  legislation  relating  thereto  as 
the  Commission  may  deem  necessary. 

FREE    CARRIAGE    OR    REDUCED    RATES. 

Sec.  22.  That  nothing  in  this  act  shall  apply  to  the  car- 
riage, storage,  or  handling  of  property  free  or  at  reduced  rates 


INTER -STATE    COMMERCE    LAW.  23 

for  the  United  States,  State  or  municipal  governments,  or  for 
charitable  purposes,  or  to  or  from  fairs  and  expositions  for 
exhibitions  thereat,  or  the  issuance  of  mileage,  excursion,  or 
commutation  passenger  tickets;  nothing  in  this  act  shall  be  con- 
strued to  prohibit  any  common  carrier  from  giving  reduced 
rates  to  ministers  of  religion;  nothing  in  this  act  shall  be  con- 
strued to  prevent  railroads  from  giving  free  carriage  to  their 
own  officers  and  employees,  or  to  prevent  the  principal  officers 
of  any  railroad  company  or  companies  from  exchanging  passes 
or  tickets  with  other  railroad  companies  for  their  officers  and 
employees;  and  nothing  in  this  act  contained  shall  in  any  way 
abridge  or  alter  the  remedies  now  existing  at  common  law  or  by 
statute,  but  the  provisions  of  this  act  are  in  addition  to  such 
remedies.  Provided,  that  no  pending  litigation  shall  in  any 
way  be  affected  by  this  act. 

APPROPRIATION. 

Sec.  2$.  That  the  sum  of  one  hundred  thousand  dollars  is 
hereby  appropriated  for  the  use  and  purposes  of  this  act  for  the 
fiscal  year  ending  June  thirtieth,  anno  Domini  eighteen  hun- 
dred and  eighty-eight,  and  the  intervening  time  anterior  thereto. 

WHEN    THE    ACT    SHALL    TAKE    EFFECT. 

Sec.  24.  That  the  provisions  of  sections  eleven  and  eighteen 
of  this  act,  relating  to  the  appointment  and  organization  of  the 
Commission  herein  provided  for,  shall  take  effect  immediately, 
and  the  remaining  provisions  of  this  act  shall  take  effect  sixty 
days  after  its  passage. 


THE  ORIGINAL  -REAGAN  BILL." 


IN  THE  HOUSE  OF  REPRESENTATIVES.— MARCH  8,  1886. 

Mr.  Reagan,  from  the  Committee  on  Commerce,  reported  the  following 
bill  as  a  substitute  for  H.  R.  2412: 

A  Bill  to  Regulate  Inter- State    Commerce   and   to  pretext 
unjust  Discriminations  by  Common  Carriers. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  America  in  Congress  assembled,  That  it  shall  be  unlawful  for 
any  person  or  persons  engaged  alone  or  associated  with  others  in  the 
transportation  of  property  by  railroad  from  one  State  or  Territory  or  the 
District  of  Columbia  to  or  through  one  or  more  other  States  or  Terri- 
tories of  the  United  States  or  the  District  of  Columbia,  or  to  or  from 
any  foreign  country,  directly  or  indirectly  to  charge  to  or  receive  from 
any  person  or  persons  any  greater  or  less  rate  or  amount  of  freight,  com- 
pensation or  reward  than  is  charged  to  or  received  from  any  other  person 
or  persons  for  like  and  contemporaneous  service  in  the  carrying,  receiv- 
ing, delivering,  storing,  or  handling  of  the  same.  All  charges  for  such 
services  shall  be  reasonable.  And  all  persons  engaged  as  aforesaid  shall 
furnish,  without  discrimination,  the  same  facilities  for  the  carriage,  re- 
ceiving, delivery,  storage,  and  handling  of  all  property  of  like  character 
carried  by  him  or  them,  and  shall  perform  with  equal  expedition  the 
same  kind  of  services  connected  with  the  contemporaneous  transporta- 
tion thereof  as  aforesaid.  No  break,  stoppage,  or  interruption,  nor  any 
contract,  agreement,  or  understanding,  shall  be  made  to  prevent  the  car- 
riage of  any  property  from  being  and  being  treated  as  one  continuous 
carriage,  in  the  meaning  of  this  act,  from  the  place  of  shipment  to  the 
place  of  destination,  unless  such  stoppage,  interruption,  contract,  arrange- 
ment, or  understanding  shall  have  been  made  in  good  faith  for  some 
practical  and  necessary  purpose,  without  any  intent  to  avoid  or  interrupt 
such  continuous  carriage  or  to  evade  any  of  the  provisions  of  this  act. 

Sec  2.  That  it  shall  be  unlawful  for  any  person  or  persons  engaged 
in  the  carriage,  receiving,  storage,  or  handling  of  property  as  mentioned 
in  the  first  section  of  this  act  to  enter  into  any  combination,  contract,  or 
agreement,  by  changes  of  schedule,  carriage  in  different  cars,  or  by  any 
other  means,  with  intent  to  prevent  the  carriage  of  such  property  from 
being  continuous  from  the  place  of  shipment  to  the  place  of  destination, 
whether  carried  on  one  or  several  railroads;  and  it  shall  be  unlawful  for 
any  person  or  persons  carrying  property  as  aforesaid  to  enter  into  any 
contract,  agreement,  or  combination  for  the  pooling  of  freights,  or  to 
pool  the  freights,  of  different  and  competing  railroads,  by  dividing  be- 
tween them  the  aggregate  or  net  proceeds  of  the  earnings  of  such  rail- 
roads, or  any  portion  of  them;  and  in  any  case  of  an  agreement  for  the 

24 


INTER- STATE    COMMERCE    LAW.  25 

pooling  of  freights  or  earnings  as  aforesaid,  each  day  of  its  continuance 
shall  be  deemed  a  separate  offense. 

Sec.  3.  That  it  shall  be  unlawful  for  any  person  or  persons  engaged 
in  the  transportation  of  property  as  aforesaid  directly  or  indirectly  to 
allow  any  rebate,  drawback,  or  other  advantage,  in  any  form,  upon  ship- 
ments made  or  services  rendered  as  aforesaid  by  him  or  them. 

Sec  4.  That  it  shall  be  unlawful  for  any  person  or  persons  engaged 
in  the  transportation  of  property  as  provided  in  the  first  section  of  this 
act  to  charge  or  receive  any  greater  compensation  for  a  similar  amount 
and  kind  of  property,  for  carrying,  receiving,  storing,  forwarding,  or 
handling  the  same,  for  a  shorter  than  for  a  longer  distance,  which  in- 
cludes the  shorter  distance,  on  any  one  railroad;  and  the  road  of  a  corpo- 
ration shall  include  all  the  road  in  use  by  such  corporation,  whether 
owned  or  operated  by  it  under  a  contract,  agreement,  or  lease  by  such 
corporation. 

Sec.  5.  That  all  persons  engaged  in  carrying  propert}7-  as  provided 
in  the  first  section  of  this  act  shall  adopt  and  keep  posted  up  schedules 
on  their  respective  roads,  as  described  in  section  four  of  this  act,  which 
shall  plainly  state: 

First.     The  different  kinds  and  classes  of  property  to  be  carried. 

Second.  The  different  places  between  which  such  property  shall  be 
carried. 

Third.  The  rates  of  freight  and  prices  of  carriage  between  such 
places,  and  for  all  services  connected  with  the  receiving,  deliver,  load- 
ing, unloading,  storing,  or  handling  the  same.  And  the  accounts  for 
such  service  shall  show  what  part  of  the  charges  are  for  transportation, 
and  what  part  are  for  loading,  unloading,  and  other  terminal  facilities. 

Such  schedules  may  be^  changed  from  time  to  time  as  hereinafter 
provided.  Copies  of  such  schedules  shall  be  printed  in  plain,  large  type, 
at  least  the  size  of  ordinary  pica,  and  shall  be  kept  plainly  posted'  for 
public  inspection  in  at  least  two  places  in  every  depot  where  freights  are 
received  or  delivered;  and  no  such  schedule  shall  be  raised  in  any  par- 
ticular except  by  the  Substitution  of  another  schedule  containing  the  spe- 
cifications above  required,  which  substitute  schedule  shall  plainly  state 
the  time  when  it  shall  go  into  effect,  and  copies  of  which,  printed  as 
aforesaid,  shall  be  posted  as  above  provided  at  least  five  days  before  the 
same  shall  go  into  effect;  and  the  same  shall  remain  in  force  until  another 
schedule  shall  as  aforesaid  be  substituted;  and  it  shall  be  unlawful  for 
any  person  or  persons  engaged  in  carrying  property  on  railroads  as  afore- 
said, after  thirty  days  after  the  passage  of  this  act,  to  charge  or  receive 
more  or  less  compensation  for  the  carriage,  receiving,  delivery,  loading, 
unloading,  handling,  or  storing  of  any  of  the  property  contemplated  by 
the  first  section  of  this  act  than  shall  be  specified  in  such  schedute  as  may  at 
the  time  be  in  force.  Any  company  or  corporation  receiving  freight  for 
shipment  in  the  United  States  to  be  carried  through  a  foreign  country, 
the  ultimate  destination  of  which  is  some  place  in  the  United  States,  said 
company  so  receiving  said  freight  shall  keep  posted  in  a  conspicuous 
place  at  the  depot  where  said  freight  is  received  for  shipment  a  schedule 
giving  the  through  rates  to  all  points  in  the  United  States  beyond  the 
foreign  territory,  a  failure  to  do  which  shall  subject  the  said  company  or 
corporation  to  all  the  penalties  herein  fixed;  and  any  freight  shipped 


26  INTER -STATE    COMMERCE    LAW. 

into  a  foreign  country,  and  reshipped  into  the  United  States,  the  through 
rate  on  which  shall  not  have  been  made  public  as  required  by  this  act, 
shall,  before  it  is  admitted  into  the  United  States  from  said  foreign  coun- 
try, be  subject  to  customs  duties  as  if  said  freight  were  of  foreign  pro- 
duction; and  any  law  in  conflict  with  this  section  is  hereby  repealed. 

Sec.  6.  That  each  and  all  of  the  provisions  of  this  act  shall  apply  to 
all  property,  and  the  receiving,  delivery,  loading,  unloading,  handling, 
storing,  or  carriage  of  the  same,  on  one  actually  or  substantially  continu- 
ous carriage,  or  as  part  of  such  continuous  carriage,  as  provided  for  in 
the  first  section  of  this  act,  and  the  compensation  therefor,  whether  such 
property  be  carried  wholly  on  one  railroad  or  partly  on  several  railroads, 
as  defined  in  section  four  of  this  act,  and  whether  such  services  are  per- 
formed or  compensation  paid  or  received  by  or  to  one  person  alone  or  in 
connection  with  another  or  other  persons. 

Sec.  7.  That  each  and  every  act,  matter,  or  thing  in  this  act  de- 
clared to  be  unlawful  is  hereby  prohibited  ;  and  in  case  any  person  or 
persons  as  defined  in  this  act,  engaged  as  aforesaid,  shall  do,  suffer,  or 
permit  to  be  done  any  act,  matter,  or  thing  in  this  act  prohibited  or  for- 
bidden, or  shall  omit  to  do  any  act,  matter,  or  thing  in  this  act  required  to 
be  done,  or  shall  be  guilty  of  any  violation  of  the  provisions  of  this  act, 
such  person  or  persons  shall  be  held  to  pay  to  the  person  or  persons  in- 
jured the  full  amount  of  damages  so  sustained,  together  with  a  reason- 
able counsel  or  attorney's  fee,  to  be  fixed  by  the  court  in  every  case  of 
recovery,  which  attorney's  fee  shall  be  taxed  and  collected  as  costs  in  the 
case,  to  be  recovered  by  the  person  or  persons  so  damaged  by  suit  in  any 
State  or  United  States  court  of  competent  jurisdiction  where  the  person 
or  persons  causing  such  damage  can  be  found  or  may  have  an  agent, 
office,  or  place  of  business.  Any  action  to  be  brought  as  aforesaid  may 
be  considered,  and  if  so  brought  shall  be  regarded,  as  a  subject  of  equity 
jurisdiction  and  discovery,  and  affirmative  relief  may  be  sought  and 
obtained  therein.  In  any  such  action  so  brought  as  a  case  of  equitable 
cognizance  as  aforesaid,  any  director,  officer,  receiver,  or  trustee  of  any 
corporation  or  company  aforesaid,  or  any  receiver,  trustee,  or  person 
aforesaid,  or  any  agent  of  any  such  corporation  or  company,  receiver, 
trustee,  or  person  aforesaid,  or  of  any  of  them,  alone  or  with  any  other 
person  or  persons,  party  or  parties,  may  and  shall  be  compelled  to  attend, 
appear,  and  testify  and  give  evidence;  and  no  claim  that  any  such  testi- 
mony or  evidence  might  or  might  not  tend  to  criminate  the  person  testi- 
fying or  giving  evidence  shall  be  of  any  avail,  but  such  evidence  or  testi- 
mony shall  not  be  used  as  against  such  person  on  the  trial  of  any  indict- 
ment against  him.  The  attendance  and  appearance  of  an}'  of  the  persons 
who  as  aforesaid  may  be  compelled  to  appear  or  testify,  and  the  giving 
of  the  testimony  or  evidence  by  the  same,  respectively,  and  the  production 
of  books  and  papers  thereby,  may  and  shall  be  compelled  the  same  as  in 
the  case  of  any  other  witness;  and  in  case  any  deposition  or  evidence,  or 
the  production  of  any  books  or  papers,  may  be  desired  or  required  for 
the  purpose  of  applying  for  or  sustaining  any  such  action,  the  same,  and 
the  production  of  books  and  papers,  may  and  shall  be  had,  taken,  and 
compelled  by  or  before  any  United  States  commissioner,  or  in  any  man- 
ner provided  or  to  be  provided  for  as  to  the  taking  of  other  depositions 
or  evidence,  or  the  attendance  of  witnesses,  or  the  production  of  other 


INTER -STATE    COMMERCE    LAW.  27 

books  or  papers  in  or  by  chapter  seventeen  of  title  thirteen  of  the  Revised 
Statutes  of  the  United  States.  No  action  aforesaid  shall  be  sustained  un- 
less brought  within  one  year  after  the  cause  of  action  shall  accrue,  or 
within  one  year  after  the  party  complaining  shall  have  come  to  a  knowl- 
edge of  his  right  of  action.  And  as  many  causes  of  action  as  may  accrue 
within  the  year  may  be  joined  in  the  same  suit  or  complaint. 

Sec.  8.  That  any  director  or  officer  of  any  corporation  or  company 
acting  or  engaged  as  aforesaid,  or  any  receiver  or  trustee,  lessee,  or  per- 
son acting  or  engaged  as  aforesaid,  or  any  agent  of  any  such  corporation 
or  company,  receiver,  trustee,  or  person  aforesaid,  or  of  one  of  them, 
alone  or  with  any  other  corporation,  company,  person,  or  party,  who 
shall  willfull}'  do,  or  cause  or  willingly  suffer  or  permit  to  be  done,  any 
act,  matter,  or  thing  in  this  act  prohibited  or  forbidden,  or  who  shall  aid 
or  abet  therein,  or  shall  willfully  omit  or  fail  to  do  any  act,  matter,  or 
thing  in  this  act  required  to  be  done,  or  cause  or  willingly  suffer  or  per- 
mit any  act,  matter,  or  thing  so  directed  or  required  by  this  act  to  be 
done  not  to  be  so  done,  or  shall  aid  or  abet  any  such  omission  or  failure, 
or  shall  be  guilty  of  any  infraction  of  this  act,  or  aid  or  abet  therein, 
shall  be  guilty  of  a  misdemeanor,  and,  upon  conviction  thereof,  shall  be 
fined  not  more  than  two  thousand  dollars. 

Sec.  9.  That  nothing  in  this  act  shall  apply  to  the  carriage,  receiv- 
ing, storage,  handling,  or  forwarding  of  property  wholly  within  one 
State,  and  not  shipped  from  or  destined  to  some  foreign  country  or  other 
State  or  Territory;  nor  shall  it  apply  to  property  carried  for  the  United 
States  at  lower  rates  of  freight  and  charges  than  for  the  general  public, 
or  to  the  transportation  of  articles  free  or  at  reduced  rates  of  freight  for 
charitable  or  religious  purposes,  or  to  or  from  public  fairs  and  exposi- 
tions for  exhibition. 

Sec  10.  That  the  words  "person  or  persons"  as  used  in  this  act, 
except  where  otherwise  provided,  shall  be  construed  and  held  to  mean 
person  or  persons,  officer  or  officers,  corporation  or  corporations,  com- 
pany or  companies,  receiver  or  receivers,  trustee  or  trustees,  lessee  or 
lessees,  agent  or  agents,  or  other  person  or  persons  acting  or  engaged  in 
any  of  the  matters  and  things  mentioned  in  this  act. 


THE  ORIGINAL  "CULLOM   BILL." 


IN  THE  SENATE  OF  THE  UNITED  STATES,  MAY  13,  1886. 
A  Bill  to  Regulate  Com^lerce. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of  the  United 
States  of  Ameriea  in  Congress  assembled,  That  the  provisions  of  this  act 
shall  apply  to  any  common  carrier  or  carriers  engaged  in  the  transporta- 
tion of  passengers  or  property  wholly  by  railroad,  or  partly  by  railroad 
and  partly  by  water  when  both  are  used,  under  a  common  control,  man- 
agement,'or  arrangement,  for  a  continuous  carriage  or  shipment,  from 
one  State  or  Territory  of  the  United  States  to  any  other  State  or  Territory 
of  the  United  States/or  from  an}'  place  in  the  United  States  to  an  adja- 
cent foreign  country,  or  from  any  place  in  the  United  States  through  a 
foreign  country  to  any  other  place  in  the  United  States,  and  also  to  the 
transportation  *m  like  manner  of  property  shipped  from  any  place  in  the 
United  States  to  a  foreign  country  and  carried  from  such  place  to  a  port 
of  transhipment,  or  shipped  from  a  foreign  country  to  any  place  in  the 
United  States  and  carried  to  such  place  from  a  port  of  entry  either  in  the 
United  States  or  an  adjacent  foreign  country:  Provided,  however.  That 
the  provisions  of  this  act  shall  not  apply  to  the  transportation  of  passen- 
gers or  property,  or  to  the  receiving,  delivering,  storage,  or  handling  of 
property,  wholly  within  one  State  or  Territory,  and  not  shipped  to  or 
from  a  foreign  country  from  or  to  such  State  or  Territory  as  aforesaid. 

The  term  " railroad"  as  used  in  this  act  shall  include  all  bridges  and 
ferries  used  or  operated  in  connection  with  any  railroad,  and  the 
term  "transportation"  shall  include  all  instrumentalities  of  shipment  or 
carriage. 

All  charges  made  for  any  service  rendered  or  to  be  rendered  in  the 
transportation  of  passengers  or  property  as  aforesaid,  or  in  connection 
therewith,  or  for  the  receiving,  delivering,  storage,  or  handling  of  such 
property,  shall  be  reasonable  and  just;  and  every  unjust  and  unreason- 
able charge  for  such  service  is  prohibited  and  declared  to  be  unlawful. 

Sec.  2.  That  if  any  common  carrier  subject  to  the  provisions  of 
this  act  shall,  directly  or  indirectly,  by  anj  special  rate,  rebate,  draw- 
back, or  other  device,  charge,  demand,  collect,  or  receive  from  any  per- 
son or  persons  a  greater  or  less  compensation  for  any  service  rendered, 
or  to  be  rendered,  in  the  transportation  of  passengers  or  property,  subject 
to  the  provisions  of  this  act,  than  it  charges,  demands,  collects,  or  receives 
from  any  other  person  or  persons  for  doing  for  him  or  them  a  like  and 
contemporaneous  service  in  the  transportation  of  a  like  kind  of  traffic 
under  substantially  similar  circumstances  and  conditions,  such  common 
carrier  shall  be  deemed  guilty  of  unjust  discrimination,  which  is  hereby 
prohibited  and  declared  to  be  unlawful;  and  any  common  carrier  who 

28 


INTER -STATE    COMMERCE    LAW.  29 

shall  violate  the  provisions  of  this  section  as  aforesaid  shall  be  liable  to 
all  persons  who  have  been  charged  a  higher  rate  than  was  charged  any 
other  person  or  persons  for  the  difference  between  such  higher  rate  and 
the  lowest  rate  charged  upon  like  shipments  during  the  same  period;  or 
if  such  lower  rate  was  made  on  any  time  contract  or  understanding,  the 
said  common  carrier  shall  be  liable  to  pay  a  like  rebate  or  drawback  to 
all  other  shippers  over  the  same  route  between  the  same  points  who  have 
shipped  goods  during  the  time  that  such  contract  or  understanding  was 
in  operation. 

Sec.  3.  That  it  shall  be  unlawful  for  any  common  carrier,  subject 
to  the  provisions  of  this  act,  to  make  or  give  any  undue  or  unreasonable 
preference  or  advantage  to  any  particular  person,  company,  firm,  cor- 
poration, or  locality,  or  any  particular  description  of  traffic,  in  any 
respect  whatsoever,  or  to  subject  any  particular  person,  company,  firm, 
corporation,  or  locality,  or  any  particular  description  of  traffic,  to  any 
undue  or  unreasonable  prejudice  or  disadvantage  in  any  respect  what- 
soever. 

Every  common  carrier  subject  to  the  provisions  of  this  act  shall,  ac- 
cording to  their  respective  powers,  afford  all  reasonable  and  proper  facil- 
ities for  the  interchange  of  traffic  between  their  respective  lines,  and  for 
the  receiving,  forwarding,  and  delivering  of  passengers  and  property  to 
and  from  their  several  lines  and  those  connecting  therewith;  but  no  such 
common  carrier  shall  be  required  to  give  the  use  of  its  tracks  or  terminal 
facilities  to  another  carrier  engaged  in  like  business.  Any  common  car- 
rier who  shall  willfully  violate  "the  provisions  of  this  section  of  this  act 
shall  be  liable  to  the  person  or  persons  injured  thereby  for  all  damages 
occasioned  by  such  violation. 

Sec.  4.  "That  it  shall  be  unlawful  for  any  common  carrier  subject  to 
the  provisions  of  this  act  to  charge  or  receive  any  greater  compensation 
in  the  aggregate  for  the  transportation  of  passengers  or  of  like  kind  of 
property,  under  substantially  similar  circumstances  and  conditions,  for  a 
shorter  than  for  a  longer  distance  over  the  same  line,  in  the  same  direc- 
tion, and  from  the  same  original  point  of  departure  or  to  the  same  point 
of  arrival;  but  this  shall  not  be  construed  as  authorizing  any  common 
carrier  within  the  terms  of  this  act  to  charge  and  receive  as  great  com- 
pensation for  a  shorteras  for  a  longer  distance  :  Provided,  however,  That 
upon  application  to  the  Commission  appointed  under  the  provisions  of 
this  act,  such  common  carrier  may,  in  special  cases,  be  authorized  to 
charge  less  for  longer  than  for  shorter  distances  for  the  transportation  of 
passengers  or  propert}r ;  and  the  Commission  may  from  time  to  time 
make  general  rules  exempting  such  designated  common  carrier  in  such 
special  cases  from  the  operation  of  this  section  of  this  act ;  and  when 
such  exceptions  shall  have  been  made  and  published  they  shall,  until 
changed  by  the  Commission  or  by  law,  have  like  force  and  effect  as 
though  the  same  had  been  specified  in  this  section. 

Any  common  carrier  who  shall  violate  the  provisions  of  this  section 
of  this  act  shall  be  deemed  guilty  of  extortion,  and  shall  be  liable  to  the 
person  or  persons  against  whom  any  such  excessive  charge  was  made  for 
all  damages  occasioned  by  such  violation. 

Sec.  5.  That  every  common  carrier  subject  to  the  provisions  of  this 
act  shall,  within  sixty  clays  after  the  appointment  of  the  Commission 


30  INTER -STATE    COMMERCE    LAW. 

hereinafter  provided  for,  file  with  said  Commission  appointed  under  the 
provisions  of  this  act  copies  of  its  tariffs  of  rates  and  fares  and  charges 
relating  to  all  classes  of  traffic  affected  by  the  provisions  of  this  act,  in- 
cluding classifications  and  terminal  charges  which  in  any  wise  change, 
affect,  or  determine  any  part  of  the  aggregate  of  such  rates  and  fares  and 
charges,  and  from  time  to  time  all  changes  made  in  the  same..  Such 
rates,  fares,  charges,  and  classifications  shall  be  made  public  by  such 
•  common  carriers  so  far  as  may,  in  the  judgment  of  the  Commission,  be 
deemed  practicable;  and  said  Commission  "shall  from  time  to  time  pre- 
scribe the  measure  of  publicity  which  shall  be  given  to  such  rates,  fares, 
charges,  and  classifications,  or  to  such  part  of  them  as  it  may  deem  it 
practicable  for  such  common  carriers  to  publish,  and  the  places  in  which 
they  shall  be  published. 

And  when  any  common  carrier  shall  have  established  and  published 
its  rates,  fares,  charges,  and  classifications,  or  any  part  of  the  same,  in 
compliance  with  the  provisions  of  this  section,  it  shall  be  unlawful  for 
such  common  carrier  to  charge,  demand,  collect,  or  receive  from  any 
person  or  persons  a  greater  or  less  compensation  than  is  set  forth  and 
specified  in  such  published  rates,  fares,  charges,  and  classifications,  until 
the  same  shall  have  been  changed  as  hereinafter  provided.  But  nothing 
in  this  act  shall  prevent  the  principal  officers  of  any  railroad  company  or 
companies  from  exchanging  passes  or  tickets  with  other  railroad  compa- 
nies for  their  officers  and  employees.  No  advance  in  such  published 
rates,  fares,  charges,  and  classifications  shall  be  made  except  after  ten 
days'  public  notice,  but  reductions  in  the  same  may  be  made  without 
previous  public  notice;  and  the  Commission  shall  prescribe  the  manner  in 
which  notice  of  advances  and  reductions  in  such  published  rates,  fares, 
charges,  and  of  changes  in  classifications  shall  be  given. 

In  cases  where  passengers  and  freight  traffic  pass  over  lines  or  routes 
operated  by  more  than  one  common  carrier,  and  the  several  common 
carriers  operating  such  lines  or  routes  establish  joint  tariffs  of  rates  or 
fares  or  charges,  it  shall  be  deemed  a  compliance  with  the  requirements 
of  this  section  in  respect  to  the  filing  of  such  tariffs  if  copies  of  such 
joint  tariffs  shall  be  filed  by  any  one  of  said  common  carriers,  and  the 
same  shall  then  be  published  by  the  common  carriers  who  are  parties 
thereto,  in  compliance  with  the  provisions  of  this  section;  but  no  com- 
mon carrier  party  to  any  such  joint  tariff  shall  be  liable  for  the  failure  of 
any  other  common  carrier  party  thereto  to  observe  and  adhere  to  the 
rates,  fares,  or  charges  thus  made  and  published. 

If  any  common  carrier  shall  neglect  or  refuse  to  file  or  publish  its 
tariffs  of  rates,  fares,  and  charges  as  provided  in  this  section,  or  any  part 
of  the  same,  such  common  carrier  shall  be  subject  to  a  writ  of  manda- 
mus, to  be  issued  by  any  circuit  court  of  the  United  States  within  the 
jurisdiction  where  the  principal  office  of  said  common  carrier  is  situated, 
and  if  such  common  carrier  be  a  foreign  corporation,  in  the  judicial  cir- 
cuit wherein  such  common  carrier  accepts  traffic  and  has  an  agent  to  per- 
form such  service,  to  compel  compliance  with  the  aforesaid  provisions  of 
this  section;  and  such  writ  shall  issue  in  the  name  of  the  people  of  the 
United  States,  at  the  relation  of  the  Commissioners  appointed  under  the 
provisions  of  this  act;  and  failure  to  comply  with  its  requirements  shall 
be  punishable  as  and  for  a  contempt;  said  the  said  Commissioners,  as 


INTER -STATE    COMMERCE    LAW.  31 

complainants,  may  also  apply,  in  any  such  circuit  court  of  the  United 
States,  for  a  writ  of  injunction  against  such  common  carrier,  to  restrain 
such  common  carrier  from  receiving  or  transporting  property  among  the 
several  States  and  Territories  of  the  United  States,  or  between  the  United 
States  and  adjacent  foreign  countries,  or  between  ports  of  transshipment 
and  of  entry  and  the  several  States  and  Territories  of  the  United  States, 
as  mentioned  in  the  first  section  of  this  act,  until  such  common  carrier 
shall  have  complied  with  the  aforesaid  provisions  of  this  section  of  this 
act;  and  for  any  willful  violation  or  failure  to  comply  with  the  aforesaid 
provisions  of  this  section  the  court  may  award  such  costs,  including 
counsel  fees,  by  way  of  penahy,  on  the  return  of  said  writs  and  after 
due  deliberation  thereon,  to  the  Commission  aforesaid,  as  may  be  just. 

Sec.  6.  That  it  shall  be  unlawful  for  any  common  carrier  subject 
to  the  provisions  of  this  act  to  enter  into  any  combination,  contract,  or 
agreement,  expressed  or  implied,  to  prevent,  by  change  of  time  schedule, 
carriage  in  different  cars,  or  by  other  means  or  devices,  the  carriage  of 
freights  from  being  continuous  from  the  place  of  shipment  to  the  place 
of  destination;  and  no  break  of  bulk,  stoppage,  or  interruption  made  by 
such  common  carrier  shall  prevent  the  carriage  of  freights  from  bemg 
and  being  treated  as  one  continuous  carriage  from  the  place  of  shipment 
to  the  place  of  destination,  unless  such  break,  stoppage,  or  interruption 
was  made  in  good  faith  for  some  necessary  purpose,  and  without  any  in- 
tent to  avoid  or  unnecessarily  interrupt  such  continuous  carriage  or  to 
evade  any  of  the  provisions  of  this  act. 

Sec.  7.  That  any  common  carrier  who  shall  willfully  do,  cause  to 
be  done,  or  permit  to  be  done  any  of  the  acts,  matters,  or  things  in  this 
act  declared  to  be  unlawful  shall  be  deemed  guilty  of  a  misdemeanor, 
and  shall,  upon  conviction  thereof  in  any  district  court  of  the  United 
States  within  whose  jurisdiction  such  offense  was  committed,  be  subject 
to  a  fine  of  not  more  than  five  thousand  dollars  for  each  offense:  Pro- 
vided, however,  That  whenever  such  common  carrier  is  a  corporation, 
any  officer,  agent,  or  person  connected  therewith  who  shall  be  guilty  of 
any  such  violation  of  this  act  shall  be  personally  liable  as  and  for  a  mis- 
demeanor, and,  upon  conviction  thereof  in  any  district  court  of  the 
United  States  within  whose  jurisdiction  such  offense  was  committed, 
shall  be  subject  to  a  fine  of  not  more  than  five  thousand  dollars  for  each 
ofiense. 

Sec.  8.  That  a  commission  is  hereby  created  and  established  to  be 
known  as  the  Inter-State  Commerce  Commission,  which  shall  be  com- 
posed of  five  Commissioners,  who  shall  be  appointed  by  the  President, 
by  and  with  the  advice  and  consent  of  the  Senate.  The  Commissioners 
first  appointed  under  this  act  shall  continue  in  office  for  the  term  of  two, 
three,  four,  five,  and  six  j^ears,  respectively,  beginning  with  the  first  day 
of  July,  anno  Domini  eighteen  hundred  and  eighty-six,  the  term  of  each 
to  be  designated  by  the  President;  but  their  successors  shall  be  appointed 
for  terms  of  six  years,  except  that  an}r  person  chosen  to  fill  a  vacancy 
shall  be  appointed  only  for  the  unexpired  term  of  the  Commissioner 
whom  he  shall  succeed.  Any  Commissioner  may  be  removed  by  the 
President  for  inefficiency,  neglect  of  duty,  or  malfeasance  in  office.  Not 
more  than  three  of  the  Commissioners  shall  be  appointed  from  the  same 
political  party.     No  person  in  the  employ  of  or  holding  any  official  re- 


32  INTER -STATE    COMMERCE    LAW. 

lation  to  any  common  carrier  subject  to  the  provisions  of  this  act,  or 
owning  stock  or  bonds  thereof,  or  who  is  in  any  manner  pecuniarily  in- 
terested therein,  shall  enter  upon  the  duties  of  or  hold  such  office.  Said 
Commissioners  shall  not  engage  in  any  other  business,  vocation,  or  em- 
ployment. No  vacancy  in  the  Commission  .shall  impair  the  right  of  the 
remaining  Commissioners  to  exercise  all  the  powers  of  the  Commission. 

Sec.  9.  That  the  Commission  hereby  created  shall  have  authority 
to  inquire  into  the  management  of  the  business  of  all  common  carriers 
subject  to  the  provisions  of  this  act,  and  shall  keep  itself  informed  as 
to  the  manner  and  method  in  which  the  same  is  conducted,  and  shall 
have  the  right  to  obtain  from  such  common  carriers  full  and  complete 
information  necessary  to  enable  the  Commission  to  perform  the  duties 
and  carry  out  the  objects  for  which  it  was  created;  and  for  the  purposes 
of  this  act  the  Commission  shall  have  power  to  require  the  attendance 
and  testimony  of  witnesses  and  the  production  of  all  books,  papers, 
tariffs,  contracts,  agreements,  and  documents  relating  to  any  matter  un- 
der investigation,  and  to  that  end  may  invoke  the  aid  of  any  court  of  the 
United  States  in  requiring  the  attendance  and  testimony  of  witnesses  and 
the  production  of  books,  papers,  and  documents  under  the  provisions  of 
this  section. 

And  any  of  the  circuit  courts  of  the  United  States  within  the  juris- 
diction of  which  such  inquiry  is  carried  on  may,  in  case  of  contumacy 
or  refusal  to  obey  a  subpoena  issued  to  any  common  carrier  subject 
to  the  provision  of  this  act,  or  other  person,  issue  an  order  requiring  such 
common  carrier  or  other  person  to  appear  before  said  Commission  (and 
produce  books  and  papers  if  so  ordered)  and  give  evidence  touching  the 
matter  in  question;  and  an}r  failure  to  obey  such  order  of  the  court  may 
be  punished  by  such  court  as  a  contempt  thereof. 

Sec  10.  That  any  person,  firm,  corporation,  or  association,  or  any 
mercantile,  agricultural,  or  manufacturing  society,  or  any  body  politic 
or  municipal  organization,  complaining  of  anything  done  or  omitted  to 
be  done  by  any  common  carrier  subject  to  the  provisions  of  this  act  in 
contravention  of  the  provisions  thereof,  may  apply  to  said  Commission 
by  petition,  which  shall  briefly  state  the  facts  ;  whereupon  a  statement  of 
the  charges  thus  made  shall  be  forwarded  by  the  Commission  to  such 
common  carrier,  who  shall  be  called  upon  to  satisfy  the  complaint  or  to 
answer  the  same  in  writing  within  a  reasonable  time,  to  be  specified  by 
the  Commission.  If  such  common  carrier,  within  the  time  specified, 
shall  make  reparation  for  the  injury  alleged  to  have  been  done,  said 
carrier  shall  be  relieved  of  liability  to  the  complainant  only  for  the  par- 
ticular violation  of  law  thus  complained  of.  If  such  carrier  shall  not 
satisfy  the  complainant  within  the  time  specified,  or  there  shall  appear  to 
be  any  reasonable  ground  for  investigating  said  complainant,  it  shall  be 
the  duty  of  the  Commission  to  investigate  the  matters  complained  of  in 
such  manner  and  by  such  means  as  it  shall  deem  proper. 

Said  Commission  shall  in  like  manner  investigate  any  complaint  for- 
warded by  the  railroad  commissioner  or  railroad  commission  of  any 
State  or  Territory,  at  the  request  of  such  commissioner  or  commission, 
and  may  institute  any  inquiry  on  its  own  motion  in  the  same  manner  and 
to  the  same  effect  as  though  complaint  had  been  made 

No  complaint  shall  at  any  time  be  dismissed  because  of  the  absence 
of  direct  damage  to  the  complainant. 


INTER -STATE    COMMERCE    LAW.  33 

Sec.  11.  That  whenever  an  investigation  shall  be  made  by  said 
Commission,  it  shall  be  its  duty  to  make  a  report  in  writing  in  respect 
thereto,  which  shall  include  the  findings  of  fact  upon  which  the  conclu- 
sions of  the  Commission  are  based,  together  with  its  recommendation  as 
to  what  reparation,  if  any,  should  be  made  by  the  common  carrier  to  any 
party  or  parties  who  may  be  found  to  have  been  injured  ;  and  such  find- 
ings so  made  shall  thereafter,  in  all  judicial  proceedings,  be  deemed 
prima  facie  evidence  as  to  each  and  every  fact  found. 

All  reports  of  investigations  made  by  the  Commission  shall  be 
entered  of  record,  and  a  copy  thereof  shall  be  furnished  to  the  party  who 
may  have  complained,  and  to  any  common  carrier  that  may  have  been 
complained  of. 

Sec.  12.  That  if  in  any  case  in  which  an  investigation  shall  be  made 
by  said  Commission  it  shall  be  made  to  appear  to  the  satisfaction  of  the 
Commission,  either  by  the  testimony  of  witnesses  or  other  evidence, 
that  anything  has  been  done  or  omitted  to  be  done  in  violation  of  the 
provisions  of  this  act,  or  of  any  law  cognizable  by  said  Commission,  by 
any  common  carrier,  or  that  any  injury  or  damage  has  been  sustained 
by  the  party  or  parties  complaining,  or  by  other  parties  aggrieved  in  con- 
sequence of  any  such  violation,  it  shah  be  the  duty  of  the  Commission  to 
forthwith  cause  a  copy  of  its  report  in  respect  thereto  to  be  delivered  to 
such  common  carrier,  together  with  a  notice  to  said  common  carrier  to 
cease  and  desist  from  such  violation,  or  to  make  reparation  for  the  injury 
so  found  to  have  been  done,  or  both,  within  a  reasonable  time,  to  be 
specified  by  the  Commission  ;  and  if,  within  the  time  specified,  it  shall 
be  made  to  appear  to  the  Commission  that  such  common  carrier  has 
ceased  from  such  violation  of  law,  and  has  made  reparation  for  the  in- 
jury found  to  have  been  done,  in  compliance  with  the  report  and  notice 
of  the  Commission,  or  to  the  satisfaction  of  the  party  complaining,  a 
statement  to  that  effect  shall  be  entered  of  record  by  the  Commission, 
and  the  said  common  carrier  shall  thereupon  be  relieved  from  further 
liability  or  penalty  for  such  particular  violation  of  law. 

Sec.  13.  Whenever  any  common  carrier,  as  defined  in  and  subject 
to  the  provisions  of  this  act,  shall  violate  or  refuse  or  neglect  to  obey  any 
lawful  order  or  requirement  of  the  Commission  in  this  act  named,  it 
shall  be  the  duty  of  the  Commission,  and  lawful  for  any  company  or  per- 
son interested  in  such  order  or  requirement,  to  apply,  in  a  summary  way, 
by  petition,  to  the  circuit  court  of  the  United  States  sitting  in  equity  in 
the  judicial  district  in  which  the  common  carrier  complained  of  has  its 
principal  office,  or  in  which  the  violation  or  disobedience  of  such  order 
or  requirement  shall  happen,  alleging  such  violation  or  disobedience,  as 
the  case  may  be  ;  and  the  said  court  shall  have  power  to  hear  and  de- 
termine the  matter,  on  such  short  notice  to  the  common  carrier  com- 
plained of  as  the  court  shall  deem  reasonable  ;  and  such  notice  may  be 
served  on  such  common  carrier,  his  or  its  officers,  agents,  oi  servants,  in 
such  manner  as  the  court  shall  direct ;  and  said  court  shall  proceed  to 
hear  and  determine  the  matter  speedily  as  a  court  of  equity,  and  without 
the  formal  pleadings  and  proceedings  applicable  to  ordinary  suits  in 
equity,  but  in  such  manner  as  to  do  justice  in  the  premises  ;  and  to  this 
end  such  court  shall  have  power,  if  it  think  fit,  to  direct  and  prosecute. 
in  such  mode  and  by  such  persons  as  it  may  appoint,  all  such  inquiries 


34  INTER -STATE    COMMERCE    LAW. 

as  the  court  uay  think  needful  to  enable  it  to  form  a  just  judgment  in  the 
matter  of  such  petition  ;  and  on  such  hearing  the  report  of  said  Com- 
mission shall  be  prima  facie  evidence  of  the  matters  therein  stated  ;  and 
if  it  be  made  to  appear  to  such  court,  on  such  hearing  or  on  report  of  any 
such  person  or  persons,  that  the  lawful  order  or  requirement  of  said 
Commission  drawn  in  question  has  been  violated  or  disobeyed,  it  shall 
be  lawful  for  such  court  to  issue  a  writ  of  injunction  or  other  proper 
process,  mandatory  or  otherwise,  to  restrain  such  common  carrier  from 
further  continuing  such  violation  or  disobedience  of  such  order  or  require- 
ment of  said  Commission,  and  enjoining  obedience  to  the  same  ;  and  in 
case  of  any  disobedience  of  any  such  writ  of  injunction  or  other  proper 
process,  mandatory  or  otherwise,  it  shall  be  lawful  for  such  court  to  issue 
writs  of  attachment,  or  any  other  process  of  said  court  incident  or  appli- 
cable to  writs  of  injunction  or  other  proper  process,  mandatory  or  other- 
wise, against  such  common  carrier,  and  if  a  corporation,  against  one  or 
more  of  the  directors,  officers,  or  agents,  of  the  same,  or  against  any 
owner,  lessee,  trustee,  receiver,  or  other  person  failing  to  obey  such  writ 
of  injunction  or  other  proper  process,  mandatory  or  otherwise  ;  and  said 
court  may,  if  it  shall  think  fit,  make  an  order  directing  such  com- 
mon carrier  or  other  person  so  disobeying  such  writ  of  injunction  or 
other  proper  process,  mandatory  or  otherwise,  to  pay  such  sum  of 
money  not  exceeding  for  each  carrier  or  person  in  default  the  sum  of 
five  hundred  dollars  for  every  day  after  a  day  to  be  named  in  the  order 
that  such  carrier  or  other  person  shall  fail  io  obey  such  injunction  or 
other  proper  process,  mandatory  or  otherwise  ;  and  such  moneys  shall 
be  payable  as  the  court  shall  direct,  either  to  the  party  complaining,  or 
into  court  to  abide  the  ultimate  decision  of  the  court,  or  into  the  Treas- 
ury ;  and  payment  thereof  may,  without  prejudice  to  any  other  mode  of 
recovering  the  same,  be  enforced  by  attachment  or  order  in  the  nature  of 
a  writ  of  execution,  in  like  manner  as  if  the  same  had  been  recovered  by 
a  final  decree  in  personam  in  such  court.  When  the  subject  in  dispute 
shall  be  of  the  value  of  two  thousand  dollars  or  more,  either  party  to 
such  proceeding  before  said  court  may  appeal  to  the  Supreme  Court  of 
the  United  States,  under  the  same  regulations  now  provided  by  law  in 
respect  of  security  for  such  appeal  ;  but  such  appeal  shall  not  operate  to 
stay  or  supersede  the  order  of  the  court  or  the  execution  of  any  writ  or 
process  thereon;  and  such  court  may,  in  every  such  matter,  order  the  pay- 
ment of  such  costs  and  counsel  fees  as  shall  be  deemed  reasonable.  When- 
ever any  such  petition  shall  be  filed  or  presented  by  the  Commission  it 
shall  be  the  duty  of  the  district  attorney,  under  the  direction  of  the 
Attorney-General  of  the  United  States,  to  prosecute  the  same  ;  and  the 
costs  and  expenses  of  such  prosecution  shall  be  paid  out  of  the  appro- 
priation for  the  expenses  for  the  courts  of  the  United  States.  For  the 
purposes  of  this  act,  excepting  its  penal  provisions,  the  circuit  courts  of 
the  United  States  shall  be  deemed  to  be  always  in  session. 

Sec.  14.  That  the  Commission  may  conduct  its  proceedings  in  such 
manner  as  will  best  conduce  to  the  proper  dispatch  of  business  and  to  the 
ends  of  justice.  A  majority  of  the  Commission  shall  constitute  a  quorum 
for  the  transaction  of  business,  but  no  Commissioner  shall  participate  in 
any  hearing  or  proceeding  in  which  he  has  any  pecuniary  interest.  Said 
Commission  may,  from  time  to  time,  make  or  amend  such  general  rules 


INTER -STATE    COMMERCE    LAW.  35 

or  orders  as  may  be  requisite  for  the  order  and  regulation  of  proceedings 
before  it,  including  forms  of  notices  and  the  service  thereof,  which  shall 
conform,  as  nearly  as  may  be,  to  those  in  use  in  the  courts  of  the  United 
States.  Any  party  may  appear  before  said  Commissior  and  be  heard, 
in  person  or  by  attorney.  Every  vote  and  official  act  of  the  Commission 
shall  be  entered  of  record,  and  its  proceedings  shall  be  public  upon  the 
request  of  either  party  interested.  Said  Commission  shall  have  an  official 
seal,  which  shall  be  judicially  noticed.  Either  of  the  members  of  the 
Commission  may  administer  oaths  and  affirmations. 

Sec.  15.  That  each  Commissioner  shall  receive  an  annual  salary  of 
seven  thousand  five  hundred  dollars,  payable  in  the  same  manner  as  the 
salaries  of  judges  of  the  courts  of  the  United  States.  The  Commission 
shall  appoint  a  secretary,  who  shall  receive  an  annual  salary  of  three 
thousand  five  hundred  dollars,  payable  in  like  manner.  The  Commission 
shall  have  authority  to  employ  and  fix  the  compensation  of  such  other 
employees  as  it  may  find  necessary  to  the  proper  performance  of  its  duties, 
subject  to  the  approval  of  the  Secretary  of  the  Interior. 

The  Commission  shall  be  furnished  by  the  Secretary  of  the  Interior 
with  suitable  offices  and  all  necessary  office  supplies.  "  Witnesses  sum- 
moned before  the  Commission  shall  be  paid  the  same  fees  and  mileage 
that  are  paid  witnesses  in  the  courts  of  the  United  States.  All  of  the  ex- 
penses of  the  Commission,  including  all  necessary  traveling  expenses  in- 
curred by  the  Commissioners,  or  by  their  employees  under  their  orders, 
in  making  any  investigation  in  any  other  places  than  in  the  city  of  Wash- 
ington, shall  be  allowed  and  paid,  on  the  presentation  of  itemized  vouch- 
ers therefor  approved  by  the  chairman  of  the  Commission  and  the  Secre- 
tary of  the  Interior. 

Sec.  16.  That  the  principal  office  of  the  Commission  shall  be  in  the 
city  of  Washington,  where  its  general  sessions  shall  be  held;  but  when- 
ever the  convenience  of  the  public  or  of  the  parties  may  be  promoted,  or 
delay  or  expense  prevented  thereby,  the  Commission  may  hold  special 
sessions  in  any  part  of  the  United  States.  It  may,  by  one  or  more  of  the 
Commissioners,  prosecute  any  inquiry  necessary  to  its  duties,  in  any  part 
of  the  United  States,  into  any  matter  or  question  of  fact  pertaining  to  the 
business  of  any  common  carrier  subject  to  the  provisions  of  this  act. 

Sec.  17.  That  the  Commission  is  hereby  authorized  to  require  annual 
reports  from  all  common  carriers  subject  to  the  provisions  of  this  act,  to 
fix  the  time  and  prescribe  the  manner  in  which  such  reports  shall  be 
made,  and  to  require  from  such  carriers  specific  answers  to  all  questions 
upon  which  the  Commission  may  need  information.  Such  annual  report 
shall  show  in  detail  the  amount  of  capital  stock  issued,  the  amounts  paid 
therefor,  and  the  manner  of  payment  for  the  same;  the  dividends  paid, 
the  surplus  fund,  if  any,  and  the  number  of  stockholders;  the  funded 
and  floating  debts,  and  the  interest  paid  thereon;  the  cost  and  value  of 
the  carrier's  property,  franchises,  and  equipment;  the  number  of  em- 
ployees and  the  salaries  paid  each  class;  the  amounts  expended  for  im- 
provements each  year,  how  expended,  and  the  character  of  such  improve- 
ments ;  the  earnings  and  receipts  from  each  branch  of  business  and  from 
all  sources;  the  operating  and  other  expenses;  the  balances  of  profit  and 
loss  and  a  complete  exhibit  of  the  financial  operations  of  the  carrier  each 
year,  including  an  annual  balance  sheet.     Such  reports  shall  also  contain 


36  IXTER- STATE    COMMERCE    LAW. 

such  information  in  relation  to  rates  or  regulations  concerning  fares  or 
freights,  or  agreements,  arrangements,  or  contracts  with  other  common 
carriers,  as  the  Commission  may  require;  and  the  said  Commission  may, 
within  its  discretion,  for  the  purpose  of  enabling  it  the  better  to  carry  out 
the  purposes  of  this  act,  prescribe  (if,  in  the  opinion  of  the  Commission, 
it  is  practicable  to  prescribe  such  uniformity  and  methods  of  keeping  ac- 
counts) a  period  of  time  within  which  all  common  carriers  subject  to  the 
provisions  of  this  act  shall  have,  as  near  as  may  be,  a  uniform  system  of 
accounts,  and  the  manner  in  which  such  accounts  shall  be  kept. 

Sec.  18.  That  the  Commission  shall,  on  or  before  the  first  day  of 
December  in  each  3Tear,  make  a  report  to  the  Secretary  of  the  Interior, 
which  shall  be  by  him  transmitted  to  Congress,  and  copies  of  which  shall 
be  distributed  as  are  the  other  reports  issued  from  the  Interior  Depart- 
ment. This  report  shall  contain  such  information  and  data  collected  by 
the  Commission  as  may  be  considered  of  value  in  the  determination  of 
questions  connected  with  the  regulation  of  commerce,  together  with  such 
recommendations  as  to  additional  legislation  relating  thereto  as  the  Com- 
mission may  deem  necessary. 

Sec.  19.  That  the  said  Commission  shall  specially  inquire  into  that 
method  of  railroad  management  or  combination  known  as  pooling,  and 
shall  report  to  Congress  what,  if  any,  legislation  is  advisable  and  expe- 
dient upon  that  subject. 

Sec.  20.  That  nothing  in  this  act  shall  apply  to  the  carriage,  storage, 
or  handling  of  property  free  or  at  reduced  rates  for  the  United  States, 
state,  or  municipal  governments,  or  for  charitable  purposes,  or  to  or  from 
fairs  and  expositions  for  exhibition  thereat,  or  the  issuance  of  mileage, 
excursion  or  commutation  passenger  tickets;  nothing  in  this  act  shall  be 
construed  to  prohibit  any  common  carrier  from  giving  reduced  rates  to 
ministers  of  religion,  and  nothing  in  this  act  contained  shall  in  any  way 
abridge  or  alter  the  remedies  now  at  law  provided,  but  the  provisions  of 
this  act  are  in  addition  to  such  remedies.  But  no  person,  association,  or 
corporation  shall  at  the  same  time  prosecute  any  complaint  before  said 
Commission  and  pursue  his  or  its  remedy  at  law;  and,  lodging  a  com- 
plaint before  such  Commission  shall  suspend,  until  the  same  is  disposed 
of,  the  common  law  remedy;  and  it  is  expressly  provided  that  no  pend- 
ing litigation  between  railroad  companies  shall  in  any  way  be  affected  by 
this  act:  Provided,  That  the  time  when  any  common  law  remedy  shall 
be  suspended  under  this  section  shall  not  be  counted  under  any  statute  of 
limitation  against  such  remedy. 

Sec.  21.  That  the  sum  of  one  hundred  thousand  dollars  is  hereby 
appropriated  for  the  use  and  purposes  of  this  act  for  the  fiscal  year  end- 
ing June  thirtieth,  anno  Domini  eighteen  hundred  and  eighty-seven,  and 
the  intervening  time  anterior  thereto. 


DEBATE 

IN  THE  SENATE  OF  THE  UNITED  STATES 

ON   THE 

Inter-State    Commerce    Bill 


REMARKS  OF  MR.  CULLOM. 
In  the  U.  S.  Senate    December  15,  1836. 

Mr.  Cullom.  Mr.  President,  during  the  last  days  of  the  last  session 
of  Congress  a  conference  was  appointed  by  the  two  Houses  upon  Senate 
bill  1532,  to  regulate  commerce.  The  conferees  on  the  part  of  the  Senate 
have  instructed  me  to  make  a  report,  which  I  send  to  the  desk. 

The  Chief  Clerk  read  as  follows: 

The  committee  of  conference  on  the  disagreeing  votes  of  the  two  Houses  on  the  amend- 
ment of  the  House  of  Representatives  to  the  bill  (81532)  to  regulate  commerce  having  met, 
after  full  and  free  conference,  have  agreed  to  recommend  and  do  recommend  to  their 
respective  Houses  as  follows — 

Mr.  Cullom.  The  conferees  report  an  amendment  to  the  Senate  bill 
in  the  nature  of  a  substitute,  and,  as  the  Senate  will  remember,  the  bill 
is  a  pretty  long  one,  and  as  it  is  not  my  purpose  to  ask  the  Senate  to  vote 
upon  it  to-day,  because  I  think  it  is  due  to  the  Senate  that  every  member 
should  have  an  opportunity  of  seeing  what  it  is,  I  do  not  know  that  it  is 
necessary  to  have  it  read.  I  ask,  therefore,  that  the  report  be  printed  and 
laid  upon  the  table  for  action  hereafter. 

Mr.  Aldrich.  I  would  like  to  suggest  to  the  chairman  of  the  com- 
mittee that  as  this  is  an  important  bill,  and  contains  important  provisions 
affecting  vast  material  interests  which  have  never  been  considered  by  the 
Senate,  a  day  certain  be  fixed  for  its  consideration  after  the  holiday 
recess. 

Mr.  Cullom.  I  desire  to  make  a  statement  of  the  changes  in  the 
bill.  The  following  is  a  statement  of  the  changes  in  the  bill  as  passed 
by  the  Senate  which  have  been  agreed  to  and  are  recommended  by  the 
committee  of  conference: 

Section  1  is  amended  by  inserting  the  words  ' '  or  the  District  of 
Columbia"  after  the  words  "United  States"  where  they  occur  in  lines 
9  and  9,  to  make  it  plain  that  the  act  will  apply  to  transportation  between 
the  States  and  Territories  and  the  District  of  Columbia,  as  well  as 
between  the  States  and  Territories. 

37 


38  INTER -STATE    COMMERCE    LAW. 

The  term  "railroad  "  is  defined  in  this  section,  beginning  with  line 
24,  as  including  "  all  bridges  and  ferries  used  or  operated  in  connection 
with  any  railroad;"  and  to  these  words  the  following  have  been  added: 
"  And  also  all  the  road  in  use  by"  any  corporation  operating  a  railroad, 
whether  owned  or  operated  under  a  contract,  agreement  or  lease." 

Sections  2,  3  and  4  of  the  Senate  bill,  prohibiting  discriminations, 
contained  provisions  in  relation  to  the  recovery  of  damages.  These  have 
been  stricken  out  of  said  sections,  and  have  been  grouped  together  in 
one  section,  which  is  made  section  8  of  the  committee  bill.  Except  as 
to  this  rearrangement,  substantially  the  only  change  made  has  been  the 
addition  of  the  provision  of  the  House  bill  that  "  a  reasonable  counsel  or 
attorney's  fee"  shall  be  allowed  by  the  court  in  every  case  of  the 
recovery  of  damages.  The  parts  of  said  sections  which  are  stricken  out 
in  consequence  of  the  rearrangement  referred  to  are  all  of  section  2  after 
the  word  "  unlawful,"  in  line  13,  all  of  section  3  after  the  word  "  busi- 
ness," in  line  18,  and  lines  23  to  27,  both  inclusive,  in  section  4.  No  other 
change  is  made  in  section  2. 

Section  3  is  also  amended  by  striking  out  the  words  "and  proper," 
in  line  12,  and  substituting  therefor  the  words  "  proper  and  equal,"  so 
as  to  require  railroads  to  afford  "equal"  as  well  as  " reasonable  and 
proper  "  facilities  to  connecting  roads  for  the  interchange  of  traffic.  Also, 
by  striking  out  the  words  ' '  but  no  such  common  carrier  shall  be  required 
to  give  the  use  of  its  track  or  terminal  facilities  to  another  carrier 
engaged  in  like  business,"  and  hy  substituting  therefor  the  following: 
' '  And  shall  not  discriminate  in  their  rates  and  charges  between  such 
connecting  lines;  but  this  shall  not  be  construed  as  requiring  any  such 
common  carrier  to  give  the  use  of  its  tracks  or  terminal  facilities  to 
another  carrier  engaged  in  like  business." 

Section  4  of  the  Senate  bill  is  amended  by  striking  out  the  words 
' '  and  from  the  same  original  point  of  departure  or  to  the  same  point  of 
arrival,"  in  lines  7  and  8,  ancl  inserting  in  lieu  thereof  the  words  "  the 
shorter  being  included  within  the  longer  distance;"  also,  by  inserting 
after  the  words  "  in  special  cases,"  in  line  13,  the  words  "after  investiga- 
tion by  the  commission." 

This  section  is  further  amended  by  striking  out  the  following  words 
in  relating  to  the  power  of  the  commission  to  suspend  the  operation  of 
the  section,  beginning  in  line  16: 

Make  general  rules  exempting  such  designated  common  carrier  in  such  special  cases 
from  the  operation  of  this  section  of  this  act ;  and  when  such  exceptions  shall  have  been 
made  and  published,  they  shall,  until  changed  by  the  commission  or  by  law,  have  like 
force  and  effect  as  though  the  same  had  been  specified  in  this  section. 

And  by  substituting  therefor  the  following  words: 

Prescribe  the  extent  to  which  such  designated  common  carrier  may  be  relieved  from 
the  operation  of  this  section  of  this  act. 

Section  19,  requiring  an  immediate  investigation  by  the  commission 
of  the  necessity  of  legislation  upon  the  subject  of  pooling,  has  been 
stricken  out,  and  section  5  of  the  committee  bill  contains  the  provision 
of  the  House  bill  prohibiting  pooling,  with  some  modifications  of  the 
language. 

Section  5  of  the  Senate  bill  has  been  replaced  by  section  6  of  the 
committee  bill,  which  combines  most  of  the  provisions  of  the  Senate  and 


INTER-  STATE    COMMERCE    LAW.  39 

House  bills  upon  the  subject  of  publicity  of  rates.  Section  5  made  it 
the  duty  of  the  commission  to  secure  publicity  of  rates  as  far  as  might 
be  found  practicable;  not  only  the  rates  between  points  on  each  railroad, 
but  rates  over  connecting  lines  as  well.  The  new  section  requires  each 
railr  •ad  to  make  public  the  rates  between  points  upon  its  own  line,  and 
in  addition  the  committee  is  directed  to  secure  publicity  of  rates  over 
connecting  lines  so  far  as  may  be  found  practicable. 

Section  9  of  the  committee  bill  is  an  addition  to  the  Senate  bill,  and 
provides  that  persons  claiming  to  be  damaged  hj  the  violation  of  the  act 
by  any  common  carrier  may  either  make  complaint  to  the  commission  as 
provided  in  the  Senate  bill,  or  may  institute  suits  for  the  recovery  of 
damages  in  their  own  behalf  in  the  district  or  circuit  courts  of  the 
United  States. 

Section  8  of  the  Senate  bill  has  been  changed  so  as  to  provide  that 
the  terms  of  the  commissioners  first  appointed  shall  run  for  two,  three, 
four,  five,  and  six  years,  respectively,  from  January  1,  1887,  without 
regard  to  the  time  of  their  appointment. 

Section  9  of  the  Senate  bill  is  amended  by  adding  to  the  provisions 
for  compelling  officers  of  railroads  to  testify,  when  summoned  by  the 
commission,  the  following: 

The  claim  that  any  such  testimony  or  evidence  may  tend  to  criminate  the  person 
giving  such  evidence  shall  not  excuse  such  witness  from  testifying;  but  such  evidence  or 
testimony  shall  not  be  used  against  such  person  on  the  trial  of  any  criminal  proceeding. 

Section  20  of  the  Senate  bill  has  been  amended  by  inserting  the  fol- 
lowing after  word  "religion"  in  line  8: 

Nothing  in  this  act  shall  be  construed  to  prevent  railroads  from  giving  free  carriage  to 
their  officers  and  employees,  or  to  prevent  the  principal  officers  of  any  railroad  company 
or  companies  from  exchanging  passes  or  tickets  with  other  railroad  companies  for  their 
officers  and  employees. 

Also,  by  striking  out  all  after  line  9,  and  substituting  therefor  the 
following: 

Existing  at  common  law  or  by  statute,  but  the  provisions  of  this  act  are  in  addition 
to  such  remedies:  Provided,  That  no  pending  legislation  shall  in  any  way  be  affected  by 
this  act. 

Mr.  Platt.  Mr.  President,  as  the  report  of  the  conference  com- 
mittee was  not  fully  read,  even  the  concluding  formal  part  of  it  being 
omitted  in  the  reading,  the  Senate  was  not  informed  by  the  reading  of 
the  report  that  I  did  not  concur  by  m.y  signature  in  the  conclusions  at 
which  the  conferees  arrived.  It  is  therefore,  perhaps,  proper  that  1  should 
say  at  this  time  that  I  was  unable  to  bring  my  mind  to  the  signature  of 
this  report,  and  it  is  also  perhaps  fair  thatTl  should  state,  to  some  extent, 
the  ground  upon  which  I  withheld  my  signature. 

I  think  I  should,  though  with  great  reluctance,  have  consented  to  all 
the  provisions  and  recommendations  of  the  report  but  one.  I  should 
have  had  great  reluctance  in  subscribing  to  the  recommendation  for  the 
change  of  the  Senate  provision  relating  to  short  hauls  and  long  hauls; 
but  if  it  had  been  necessary  to  get  an  agreement  I  think  I  would  not 
have  withheld  my  assent  to  that  change.  But  I  was  unable  to  agree  to 
the  surrender  of  the  provision  in  the  Senate  bill  directing  the  commission, 
when  it  should  be  appointed,  to  make  an  immediate  investigation  of  what 
is  known  as  pooling  between  railroads  and  to  report  their  conclusions 
and  recommendations  thereupon  to  Congress,  and  substitute  therefor  the 


40  INTER- STATE    COMMERCE    LAW. 

absolute  prohibition  under  penalties  of  a  thousand  dollars  a  day  for  non- 
compliance, with  the  provision  which  was  contained  in  the  House  bill  or 
the  House  amendment  to  the  Senate  bill. 

I  will  say  now,  however,  that  I  think  the  public  prejudice,  if  there 
be  one,  existing  against  pooling  by  railroads  is  largely  the  result  of  ignor- 
ance on  the  part  of  the  public  as  to  what  railroad  pools  really  are.  The 
Senator  from  Vermont  [Mr.  Edmunds]  suggests  "  want  of  information." 
I  do  not  know  that  the  public  is  ever  ignorant,  but  I  do  believe  that  there 
exists  a  very  great  deal  of  misapprehension  in  the  public  mind  as  to  the 
nature,  the  effect,  the  result  upon  the  general  welfare  of  the  country  of 
pooling  contracts  between  railroads ;  and  I  believe,  as  I  thought  the  Sen- 
ate believed,  that  the  bill  as  it  was  passed  by  the  Senate  was  calculated 
to  cure  whatever  evils  had  grown  out  of  the  system  of  railroad  pooling, 
so  that  before  the  report  of  the  commission  which  was  provided  for  in 
the  Senate  bill  upon  this  subject  should  be  made,  the  people  would  have 
become  convinced  that  the  evils  which  they  supposed  to  result  from  the 
pooling  of  freights  by  railroads  were  either  imaginary  or  had  been  cured 
by  the  operation  of  the  bill  which  was  passed  by  the  Senate. 

I  was  not  unmindful  of  the  fact  that  all  interstate  commerce,  so  far 
as  relates  to  freight,  is  to-day  transacted  under  pooling  arrangements  by 
the  railroads,  and  that  an  absolute  prohibition  of  pooling  was  to  break 
up  at  once,  or,  as  the  bill  now  reads,  within  sixty  days  after  its  passage, 
eveiy  arrangement  by  which  the  interstate  commerce  business  of  this 
country  is  at  present  conducted.  It  seemed  to  me,  with  my  knowledge 
of  the  history  of  the  management  of  railroads,  and  with  my  knowledge 
of  legislation  upon  this  subject,  that  the  result  would  be  an  immediate 
rate-war  by  all  the  railroads  of  the  United  States.  At  least,  that  was  my 
apprehension,  and  I  believed  that  the  evils  and  consequences  which 
would  result  from  that  would  be  very  much  greater  in  their  injurious 
effects  upon  the  public,  upon  the  prosperity  of  the  country,  than  any 
evils  which  now  exist  by  reason  of  what  are  known  as  pooling  contracts. 

Mr.  Cullom.  Mr.  President,  I  did  not  expect  to  say  anything  on 
the  general  subject  of  the  bill,  and  I  shall  only  add  a  word  to  what  has 
been  stated. 

I  think  that  my  colleague  on  the  committee  is  probably  laboring 
under  undue  fear  of  the  consequences  of  the  passage  of  this  bill  on 
account  of  the  prohibition  of  pooling.  One  of  the  purposes  of  the  bill 
itself  by  requiring  publicity  of  rates  and  preventing  change  of  rates  to  a 
higher  schedule,  except  on  ten  days'  notice,  is  to  bring  about  that  stability 
of  rates  which  the  railroad  companies  themselves  are  appealing  to  us  to 
have  brought  about,  because  under  the  system  of  pooling  they  have  not 
been  able  to  bring  it  about. 

So,  in  my  judgment,  the  apprehension  of  the  Senator  from  Connec- 
ticut that  it  is  going  to  be  injurious  to  the  business  of  the  country  will 
prove  to  be  unfounded,  at  least  I  hope  and  I  believe  so.  I  think  every 
Senator  will  bear  me  out  in  saying  that  I  have  not  been  disposed  to  con- 
sent to  anything  going  into  this  bill  that  was  unreasonable,  at  least  in 
my  own  judgment.  As  I  said  a  moment  ago,  I  would  not  have  consented 
to  the  provision  of  the  bill  prohibiting  pooling  if  I  believed  it  would 
bring  upon  the  country  that  sort  of  trouble  which  the  Senator  from  Con- 
necticut indicates  that  he  apprehends.    Every  one  knows  that  the  rail- 


INTER -STATE    COMMERCE    LAW.  41 

road  companies  themselves  have  finally  become  reconciled  to  some 
national  legislation,  because  they  have  not  been  able  to  protect  them- 
selves, one  from  another,  and  I  think  that  the  provisions  of  this  bill  in 
relation  to  publicity,  and  the  other  provisions  to  guard  against  various 
wrong-doings  on  their  part,  will  have  very  great  force  and  effect  in  bring- 
ing about  that  sort  of  stability  which  it  has  been  the  ostensible  purpose 
at  least  of  pooling  to  secure. 

Every  one  knows  that  this  question  has  been  bandied  about  here 
from  one  Congress  to  another  for  many  years,  and  Congress  has  never 
yet  done  anything  on  the  subject.  The  Supreme  Court  of  the  United 
States,  within  the  last  two  or  three  months,  has  made  a  decision  which 
throws  upon  Congress  the  unquestionable  duty  of  legislation  regulating 
interstate  commerce  if  we  believe  it  ought  to  have  any  regulation.  While 
the  bill  is  not  exactly  as  I  wanted  it,  while  it  is  not  exactly  the  bill  of  the 
Senate,  yet  except  as  to  the  provision  in  regard  to  pooling  it  is  practically 
the  Senate  bill,  and  I  hope  that  Senators  when  the  time  comes  for  its 
consideration  will  allow  the  report  to  be  concurred  in. 


REMARKS  OF  MR.  WILSON,  OF  IOWA. 
In  the  U.  S.  Senate  Dec.  21,  1886. 

The  Senate  resumed  the  consideration  of  the  report  of  the  Committee 
on  Commerce  on  the  bill  (S.  1,532)  to  regulate  commerce. 

Mr.  Wilson,  of  Iowa. — Mr.  President,  it  is  more  than  a  decade 
since  the  agitation  which  finds  a  result  in  the  report  now  commanding 
our  attention  became  active  in  Congress.  It  had  moved  upon  the  minds 
of  the  people  and  made  its  presence  felt  by  the  instrumentalities  of  state 
governments  before  it  appeared  here.  At  its  inception  it  manifested 
staying  powers  which  portented  ultimate  success.  It  was  an  assertion 
by  disturbed  conditions  and  interests  of  sections,  localities,  business  of 
the  forceful  doctrine  of  equality  on  which  our  system  of  government  is 
founded.  It  was  a  cumulative  declaration  that  that  doctrine  is  not  con- 
fined in  its  application  to  the  individual  and  his  distinctive  personal  re- 
lations, but  extends  to  all  of  the  affairs,  interests,  and  relations  that  are 
evolved  and  established  by  organized  communities  and  movements  of 
government.  It  was  an  assertion  that  the  equality  which  has  been  our 
boast  and  pride  from  the  beginning  is  a  principle  of  society  applicable  to 
all  things  upon  which  government  can  act.  Hence  the  agitation  in  the 
very  nature  of  things  had  staying  powers  equal  to  all  of  the  exactions 
which  the  struggle  precedent  to  success  might  impose. 

A  comparatively  new  system  of  transportation  had  in  effect  and  sub- 
stantially reversed  all  of  our  methods  of  domestic  trade  and  commerce. 
It  had  assaulted  all  of  the  doctrines  of  our  long  established  law  relative 
to  the  duties  and  responsibilities  of  common  carriers.  It  had  asserted  a 
masterful  control  of  the  doctrine  of  equal  rights,  and  established  in  its 
stead  apractice  of  discrimination  that  at  last  shocked  the  people's  sense 
of  justice  and  fair  play.  It  laid  its  usurping  hand  upon  sections,  local- 
ities, associations,  and  individuals,  and  all  of  their  interests  of  trade, 
commerce,  and  business  of  whatsoever  kind.  It  has  steadily  and  un- 
reasonably refused  to  recognize  the  simplest  business  principles,  and 
marked  out  lines  of  action  for  itself,  which  has  excited  the  resentment  of 
almost  every  interest  it  was  created  to  serve.  It  has  made  itself  an  inter- 
meddler  in  almost  every  department  of  business  and  in  almost  every  de- 
tail thereof.  It  has  refused  to  admit  that  it  was  created  to  serve  the 
proper  purposes  and  interests  of  society,  and  has  assumed  to  direct  and 
control  them.  Not  the  public  interests,  but  its  own  have  been  its  study, 
forgetting  that  the  true  method  of  conserving  the  best  conditions  of  both 
is  to  recognize  the  equal  rights  of  each. 

The  managers  of  this  system,  while  admitting  great  defects  in  it  in 
respect  of  its  own  affairs,  have  resolutely  opposed 'all  efforts  of  the  state 
and  national  governments  to  project  and  establish  reforms  which  would 
tend  to  assure  justice  and  promote  the  common  interest,  and  this  ex- 
plains why  some  conservative  and  proper  legislation  for  the  regulation  of 
the  unsatisfactory  conditions  existing  in  the  interstate  commerce  of  the 

42 


INTER -STATE    COMMERCE    LAW.  43 

country  was  not  years  ago  enacted  by  Congress.  There  has  been  no  dis- 
position on  the  part  of  the  managers  of  our  transportation  system  to  aid 
in  the  formulation  of  legislation  which  would  tend  to  correct  the  abuses 
that  the}r,  in  common  with  afflicted  individuals  and  communities,  admit 
to  exist.  They  have  tried  among  themselves  to  find  remedies  for  some  of 
these  things  in  so  far  as  they  affect  themselves  and  the  immediate  inter- 
ests committed  to  their  charge,  and  have  uniformly  failed.  They  will 
neither  keep  faith  with  each  other  nor  allow  the  public  to  aid  them;  and 
in  all  this  they  have  done  violence  to  their  own  interests  and  have  inten- 
sified the  demand  of  the  people  for  some  legislative  remedy.  It  will  not 
be  wise  to  longer  delay  some  affirmative  response  to  this  demand. 

Mr.  President,  the  contest  which  has  attended  this  subject  has  been 
long  and  tedious.  We  have  now  reached  a  point  in  the  movement  when 
something  may  be  done.  The  adoption  of  the  report  of  the  conference 
committee  which  we  are  now  considering,  by  both  houses  of  Congress, 
while  it  will  not  accomplish  all  that  I  should  like  to  have  done,  will 
afford  the  country  an  opportunity  to  test  a  regulative  remedy,  unless  ob- 
jections by  the  President  be  interposed  by  a  veto  of  the  bill.  That  differ- 
ences of  opinion  prevail  relative  to  the  various  propositions  embodied  in 
the  report,  we  all  know.  But  this  is  not  a  new  phase  of  the  movement. 
From  the  very  commencement  of  the  agitation  which  has  culminated  in 
the  bill  now  before  us,  these  differences  have  existed. 

The  most  earnest  friends  of  legislative  regulation  of  interstate  com- 
merce have  never  wholly  agreed.  But  they  have  toilsomely  pursued  the 
subject.  Study,  investigation,  earnest  effort  they  have  pursued  for  years. 
Both  houses  of  Congress  have  had  their  proper  committees  at  work  on 
the  subject  for  more  than  a  decade.  The  public  press  has  given  it  pro- 
longed attention  and  forceful  discussion.  All  of  these  agencies  of  infor- 
mation and  effort,  in  so  far  as  they  have  tended  to  affirmative  action, 
have  been  confronted  by  the  apparition  of  the  forces  of  the  transporta- 
tion system  of  the  country.  These  forces  are  active  now,  pleading  for 
further  delay  and  more  investigation.  In  the  New  York  Tribune  of  the 
19th  instam/l  read  a  reported  interview  with  the  president  of  the  New 
York,  Lake  Erie  and  Western  Railroad,  and  from  it  I  make  the  follow- 
ing extract.  The  question  having  been  put  to  him,  "What  do  you  sug- 
gest?" he  answered: 

"That  Congress  at  once  pass  a  bill  something  like  this,_  appointing 
five  boards  of  commissioners  of  three  members  each,  to  examine  all  ques- 
tions involved  and  clothed  with  all  powers  necessary  to  obtain  thorough, 
accurate  information,  including  the  examination  of  the  books  and  ac- 
counts of  the  railroad  companies,  one  of  these  boards  to  act  in  the  terri- 
tory of  the  Pacific  roads,  one  for  the  roads  northwest  of  Chicago,  one  for 
the  States  between  the  Mississippi  and  Ohio  Rivers,  one  for  the  Southern 
States,  and  one  for  the  trunk  lines;  these  commissioners  to  assume  their 
duties  immediately  upon  their  appointment  by  the  President  and  confirma- 
tion by  the  Senate,  and  be  required  to  have  their  reports  ready  by  October  1, 
1887.  Then  these  fifteen  commissioners,  as  a  board,  should  recommend 
to  Congress  when  it  reassembles  next  December  suitable  legislation  to 
meet  the  requirements  of  the  case  and  to  settle  this  difficult  problem." 

No  one  need  have  any  difficulty  in  arriving  at  the  true  meaning  of 
this  statement.    It  simply  means  delay.    For  more  than  ten  years  this 


44  INTER -STATE    COMMERCE    LAW. 

has  been  the  policy  of  the  managers  of  the  transporting  companies  of  the 
country.  Their  constant  and  ever  repeated  declaration  has  been  that 
Congress  is  not  sufficiently  informed  in  respect  of  the  intricacies  of  the 
transportation  problem  to  act  with  due  caution  and  wisdom  thereon. 
But  Congress  has  for  years  been  informing  itself  concerning  all  of  the 
phases  of  the  question.  Committees  have  spent  months  of  time  in  the 
investigation.  They  have  visited  various  sections  of  the  country,  exam- 
ining hundreds  of  witnesses,  and  giving  to  all  parties  and  interests  ample 
opportunity  to  present  their  views.  Report  after  report  has  been  made, 
accompanied  by  thousands  of  pages  of  printed  testimony,  all  of  which 
have  been  open  to  the  inspection  of  whomsoever  cared  to  devote  their 
time  and  give  their  attention  thereto.  There  is  not  a  proposition  either 
important  or  unimportant  in  the  conference  report  now  before  the  Senate 
that  has  not  been  considered  in  the  investigations  of  the  committees  of 
Congress  time  and  again  and  year  after  year.  During  all  this  time  the 
demand  has  been  for  more  delay,  and  it  has  been  allowed  until  the  public 
has  become  tired  of  it  and  now  demands  action. 

But  it  is  urged  that  there  is  great  diversity  of  opinion  relative  to 
what  ought  to  be  done  in  the  premises.  This  is  true.  It  has  been  true 
from  the  beginning  of  the  agitation.  Will  delay  change  this  feature  of 
the  case  ?  Will  the  practices  of  the  transporting  companies  in  respect  of 
the  things  complained  of  by  the  people  and  concerning  which  this  report 
proposes  remedies?  Answering  these  questions  in  the  light  of  past  ex- 
perience, a  negative  must  be  given  to  each  of  them.  How  are  we  to 
resolve  this  conflict  of  opinion  except  by  doing  something?  Theories 
have  been  having  free  course  of  assertion  for  years.  They  are  as  diver- 
gent now  as  ever.  Delay  will  not  change  this  fact.  Another  committee, 
whether  it  be  composed  of  Senators  and  Representatives  or  of  commis- 
sioners of  inquiry,  will  bring  us  no  more  definite  result  than  we  now 
have  before  us.  And  so,  in  my  judgment,  there  is  but  one  way  to  an 
effective  resolution  of  this  conflict  of  opinion. 

We  must  have  affirmative  action.  We  must  enact  a  law  for  the  reg- 
ulation of  interstate  commerce,  and  by  experience  under  its  administra- 
tion come  to  a  knowledge  of  the  right  and  wrong  of  the  war  of  opinion 
now  obstructing  our  way.  We  may  investigate  and  debate  forever  and 
still  be  apart.  But  action  and  the  experience  it  will  enforce  are  sure  to 
bring  an  end  to  the  contention  that  will  conserve  the  true  interests  of  all 
concerned.  If  we  elect  the  opposite  course  then  will  we  invite  into  the 
case  the  elements  of  danger;  for  a  continuance  of  the  many  real  iniqui- 
ties which  have  found  lodgement  in  our  transportation  system  may  in- 
duce a  resentment  on  the  part  of  the  people  that  may  not  be  satisfied  with 
the  character  of  experiment  it  is  now  proposed  to  try. 

Mr.  President,  no  one  who  has  studied  the  railroad  problem  and  has 
come  to  a  knowledge  of  the  men  who  manage  our  railroad  corporations 
can  doubt  its  difficulties,  nor  dispute  the  very  great  aggregation  of  com- 
manding ability  found  among  those  who  handle  the  great  interests  in- 
volved. But  while  these  men  possess  very  great  ability  and  are  marked 
intellectual  forces,  they  have,  it  seems  to  me,  fallen  short  in  one  essential 
element.  Had  they  possessed  this  at  its  best,  I  doubt  if  the  railroad 
problem  with  its  present  involvements  could  have  appeared  in  this  coun- 
try.    That  one  element  is  what  is  usually  denominated  common  sense. 


INTER -STATE    COMMERCE    LAW.  45 

Most  of  the  facts  on  which  the  complaints  of  the  people  relative  to  the 
management  of  the  transportation  of  the  country  are  based  may  be  ac- 
counted for  by  the  absence  of  this  essential  element. 

There  is  no  other  way  by  which  to  account  for  the  present  unfor- 
tunate involvement  of  the  transportation  question.  The  average  amount 
of  prudential  action  found  in  ordinary  business  affairs  of  men  would,  if 
applied  to  railroad  management,  have  avoided  our  present  predicament. 
This  is  apparent  not  only  in  their  relations  with  the  public  but  also  in 
those  pertaining  to  the  corporations  themselves.  Let  a  man  step  out  of 
active  railroad  management,  though  still  retaining  his  investment  inter- 
est, and  he  is  very  apt  to  acknowledge  the  truth  of  all  that  I  have  said  in 
this  regard.  I  found  such  a  case  reported  in  the  Chicago  Tribune  a  few 
days  ago.  An  ex-railroad  manager,  still  largely  interested  in  Eastern 
and  Western  roads,  in  talking  with  a  reporterof  that  paper  in  respect  of 
the  very  measure  we  are  now  considering,  said: 

' '  It  would  prevent  reckless  competition  between  the  various  roads 
and  stop  the  craze  for  constructing  useless  lines  in  territory  already  suffi- 
ciently supplied  with  railroad  facilities.  He  was  particularly  enthusiastic 
about  the  provision  prohibiting  pooling.  This,  he  said,  was  the  best 
feature  of  the  bill,  and  he  could  not  see  why  any  particular  opposition 
should  be  shown  toward  it  by  Senator  Piatt.  The  law  itself  would  ac- 
complish all  and  much  more  than  was  expected  of  the  pools.  There 
being  no  longer  any  reckless  competition,  no  unjust  discrimination,  and 
the  publicity  and  uniformity  of  rates  assured,  there  would  no  longer  be 
any  use  for  pools.  Those  pools  had  proved  a  most  expensive  experi- 
ment, and  no  adequate  results  were  gained.  Enough  would  be  saved  by 
having  no  longer  to  support  high-salaried  commissioners,  assistant  com- 
missioners, arbitrators,  armies  of  clerks,  and  from  office  rents,  advertis- 
ing, commissions,  rebates,  etc.,  to  pay  the  dividends  for  many  of  the 
lines  which  are  now  barely  able  able  to  meet  the  interest  on  their  indebt- 
edness." 

This  statement  of  the  case  is  forceful  and  true.  It  comes  from  a  man 
who  has  had  experience  as  a  railroad  manager,  and  who,  as  such,  doubt- 
less participated  in  the  very  follies  which,  as  an  investor,  he  now  de- 
nounces. He  sees  how  great  reform  would  come  from  the  enactment  of 
this  bill.  No  one  thing  has  given  the  railroads  greater  cost  and  more 
trouble  than  the  pool  system.  No  one  thing  has  done  more  to  demoral- 
ize railroad  managers,  officers,  agents,  and  all  involved  either  directly 
or  indirectly  in  its  administration  than  the  railroad  pool.  Indeed,  it  has 
come  to  be  expected  that  the  pool  of  to-day  will  be  disregarded  by  some 
of  its  members  to-morrow,  and  it  has  come  to  be  the  basis  of  the  hope  of 
reward  to  railroad  officers  and  agents  to  successfully  enlarge  business  in 
violation  of  such  arrangements.  But  such  practices  cannot  be  kept 
under  cover  forever,  and  then  comes  the  rate  war  and  loss  of  revenue 
from  points  of  competition. 

Under  the  present  system,  however,  these  losses  are  unloaded  on  to 
the  business  of  intermediate  or  local  points.  This  practice,  in  itself  an 
outrage,  is  a  most  fruitful  source  of  complaint  on  the  part  of  the  people. 
But  even  when  the  obligations  of  the  pool  are  observed  the  traffic  is  often 
conducted  on  a  basis  of  rates  less  than  fairly  remunerative,  when  com- 
pared with  those  charged  <it  the  local  stations.     A  vast  amount  of  the 


46  INTER -STATE    COMMERCE    LAW. 

railroad  traffic  of  the  country  is  done  from  so-called  competing  points  at 
rates  less  than  half  those  charged  at  local  points  on  the  same  lines.  This 
is  an  inequity  that  ought  not  to  be  tolerated,  and  which  the  bill  we  are 
now  considering  will  prevent,  if  it  shall  become  a  law.  Let  this  be  done, 
and  no  one  can  fail  to  see  that  it  will  go  very  far  towards  correcting  the 
bad  state  of  feeling  existing  between  the  railroads  and  the  people.  It 
will  serve  the  true  interests  of  the  railroads,  because  it  will  prevent  the 
foolish,  wasteful,  and  demoralizing  rate  wars;  for  no  railroad  company 
will  grant  a  less  than  remunerative  rate  for  through  freight  if  it  can  not 
unload  its  loss  on  the  local  stations  along  its  line.  It  will  serve  the  inter- 
ests of  the  people  whose  business  goes  to  and  from  the  local  stations,  be- 
cause it  will  assure  them  at  least  as  reasonable  rates  as  are  given  to  others, 
and  this  is  one  of  the  most  desirable  results  that  can  be  found  in  the  en- 
tire field  covered  by  the  present  controvers}7.  If  it  can  be  reached  and 
established  it  will  go  far  towards  restoring  that  equality  to  localities  that 
has  been  so  perfectly  eliminated  from  our  transportation  sj'stem. 

The  two  sections  of  the  bill  reported  by  the  conference  committee 
which  most  tend  to  bring  about  this  result  are  the  fourth  and  fifth. 

The  fourth  section  is  a  modification  of  the  provision  as  it  originally 
passed  the  Senate.  It  preserves  the  clause  of  that  bill  which  declared 
that  the  provision  relative  to  the  shorter  and  longer  distances,  shall  not  be 
construed  as  authorizing  any  common  carrier  within  the  terms  of  the  act 
to  charge  and  receive  as  great  compensation  for  the  former  as  for  the 
latter.  It  is  also  modified  so  as  to  make  it  more  effective  in  respect  of 
the  prohibition  against  greater  charges  being  made  for  the  shorter  than 
the  longer  distance;  and  it  limits  the  power  of  the  commissioners  to  au- 
thorize the  charging  of  less  for  a  greater  than  a  shorter  distance  to  special 
cases.  Each  one  of  these  modifications  is  in  the  line  of  the  original  bill 
as  it  passed  the  Senate,  and,  it  seems  to  me,  improves  it. 

The  two  sections  quoted  have  been  sharply  criticised  by  the  repre- 
sentatives of  the  railroad  companies  by  letters  in  the  public  press  and  by 
telegrams  from  the  day  they  were  first  given  to  the  country  in  the  report 
of  the  conference  committee.  It  is  objected  that  the  provision  of  the 
fourth  section  in  respect  of  distances  will,  if  enacted  into  law,  establish 
a  rule  of  mileage  rates;  that  it  can  only  be  obeyed  by  the  companies  by 
charging  the  same  rate  per  mile,  no  matter  what  the  distance  may  be.  I 
shall  not  stop  to  discuss  the  subject  presented  by  this  objection.  It  is 
sufficient  to  say  that  the  section  presents  no  such  proposition,  and  I  shall 
discuss  what  we  have  before  us  instead  of  wasting  time  on  what  is  not 
here.     The  language  of  the  section  is: 

That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of  this  act 
to  charge  and  receive  for  the  transportation  of  passengers,  or  of  like  kind  of  property,  un- 
der substantially  similar  circumstances  and  conditions  for  a  shorter  than  a  longer  distance 
over  the  same  line,  in  the  same  direction,  the  shorter  being  included  in  the  longer  distance. 

What  does  this  mean?  Let  me  answer  this  question  by  an  illustra- 
tion. In  round  numbers  it  is,  say,  500  miles  from  Omaha,  Neb.,  and 
Council  Bluffs,  Iowa,  to  Chicago,  111.  Suppose  the  railroad  companies 
operating  lines  between  these  points  should,  in  the  event  of  this  bill  be- 
coming a  law,  fix  a  rate  on  any  particular  class  of  freight  at  $40  per  car 
for  the  entire  500-mile  haul,  what  wrould  result  as  to  intermediate  points? 
Why,  that  each  of  such  points  could  not  be  charged  more  than  $40  per 
car  for  a  shorter  haul  of  like  class  of  freight  over  the  same  line. 


INTER -STATE    COMMERCE    LAW.  47 

The  charge  for  the  haul  over  the  entire  line  would  be  tne  maximum 
rate  for  carriage  over  a  part  of  the  line.  If  the  charge  be  $40  per  car 
from  Council  Bluffs  over  the  Chicago,  Burlington  and  Quincy  line,  then 
no  more  than  that  can  be  charged  from  Red  Oak,  Chariton,  Ottumwa, 
Fairfield,  or  any  other  station  ontiie  line  in  Iowa  to  Chicago,  or  from  any  of 
them  to  any  station  on  the  same  road  in  the  State  of  Illinois.  The  estab- 
lishment of  this  rule  by  law  will  be  a  great  relief  to  all  of  the  people  and 
business  on  all  of  said  lines,  and  like  results  will  come  to  the  people  and 
business  of  every  other  state,  and  the  territories  as  well,  on  every  rail- 
road in  the  country  within  the  terms  of  the  act.  The  experience  of  in- 
termediate stations,  under  this  rule,  would  be  very  different  from  that 
which  the  practices  of  the  railroad  companies  now  inflicts  them  with. 

Now  it  is  not  uncommon  for  intermediate  stations  to  be  forced  to 
pay  for  the  transportation  of  freight  both  to  and  from  them  double  the 
rates  charged  between  the  terminal  points  of  the  roads  on  which  they  are 
situate.  _  And  this  great  wrong  is  one  of  the  most  forceful  causes  of  the 
complaints  which  have  come  up  from  the  people  relative  to  railroad  man- 
agement. While  it  exists  there  will  be  discontent,  and  there  ought  to  be, 
for  the  practice  is  in  every  sense  wrong.  It  proceeds  upon  the  theory 
that  it  is  the  privilege  of  the  railroad  companies  to  unload  upon  the  hith- 
erto helpless  intermediate  stations  all  of  the  losses  and  burdens  which 
have  resulted  from  the  bad  management  of  the  administrator  of  the  affairs 
of  the  corporations. 

Another  inquiry  relative  to  the  fourth  section  has  been  made  in  re- 
spect of  the  rates  which  may  be  charged  under  its  provisions.  Does  it 
authorize  a  railroad  company  in  all  cases  to  charge  as  much  for  a  shorter 
as  for  a  longer  distance?  If  this  question  were  directed  against  the  bill 
as  it  came  from  the  House  of  Representatives  it  would  admit  of  none 
other  than  an  affirmative  answer,  for  it  simply  declared  that  no  railroad 
company  subject  to  its  terms  should  charge  and  receive  any  greater  com- 
pensation for  a  shorter  than  for  a  longer  distance,  thus  clearly  raising  the 
implied  power  to  charge  as  much  by  virtue  of  the  terms  of  the  bill  itself. 
But  when  the  question  is  applied  to  the  bill  as  it  passed  the  Senate,  and  to 
the  terms  of  the  report  now  before  us,  the  answer  must  be  in  the  negative, 
for  the  implication  created  by  the  House  bill  is  expressly  avoided  "by  the 
declaration  of  both  the  Senate  bill  and  the  report  that  the  language  em- 
ployed by  them — 

Shall  not  be  construed  as  authorizing  any  common  carrier  within  the  terms  of  this  act 
to  charge  and  receive  as  great  compensation  for  a  shorter  as  for  a  longer  distance. 

Hence  the  charge  fixed  for  the  greater  distance  will  not,  by  operation 
of  law,  become  the  indisputable  rate  for  the  shorter  carriage.  The  ques- 
tion of  the  reasonableness  of  the  rate  is  left  just  as  it  now  exists.  So> 
that,  if  the  rate  for  the  long  haul  of  500  miles  be  fixed  at  $40,  as  put  in 
the  illustration  I  have  used,  it  will  not  conclude  the  shipper  from  con- 
testing a  charge  of  the  same  amount  for  a  carriage  of  200,  or  100,  or  50, 
or  any  other  number  of  miles. 

The  first  office  of  the  section  in  respect  of  its  limitation  on  rates  is 
to  protect  the  people  and  business  of  intermediate  points  from  being 
forced,  as  they  are  under  present  practices,  to  make  good  the  losses 
which  result  from  mismanagement  or  wrong  practices,  of  whatsoever 
kind,  of  the  administrators  of  our  railway  system.     The  second  is  to  pre- 


48  IXTER- STATE    COMMERCE    LAW. 

serve  to  them  the  right  to  contest  the  reasonableness  of  the  charges  im- 
posed just  as  they  now  possess  it.  These  are  simply  the  proper  rules  of 
conservative  business,  and  are  not  obnoxious  to  the  criticisms  aimed  at 
them  by  those  who  may  have  been  engaged  in  their  violation. 

But  it  is  objected  that  the  fifth  section,  which  I  have  already  quoted, 
is  harsh,  unreasonable,  and  unjust?  Why?  Is  there  anything"m  it  that 
applies  to  railroad  management  a  new  and  exceptional  business  rule? 
Do  not  men  get  on  well  in  other  departments  of  business  without  resort- 
ing to  the  practice  of  pooling?  Suppose  the  managers  of  our  railroads 
should  devote  as  much  time,  care,  and  ability  in  applying  to  their  affairs 
the  ordinary  and  conservative  business  rules  which  other  men  observe, 
could  they  not  present  the  results  of  success  which  appear  in  other  fields 
of  enterprise?  Do  they  not  all  know  from  actual  experience  that  the 
railroad  pool  is  a  delusion  and  a  snare?  What  is  more  common  among 
them  than  violations  of  pooling  agreements?  What  calls  them  together 
oftener  than  these  violations? 

Do  they  not  know  that  the  whole  system  and  the  practices  under  it 
tend  to  business  demoralization,  and  to  a  sort  of  moral  obliquity  in  the 
management  of  affahs?  And  are  not  these  things  sufficient  to  suggest  to 
the  really  able  and  keen-witted  men  who  control  the  railroads  of  this 
country  that  it  is  quite  time  for  them  to  abandon  a  practice  which  hurts 
quite  as  much  as  it  helps,  is  unreliable,  vexatious  and  expensive;  first  to 
the  corporations  and  finally  to  the  public?  If  they  do  not  know  these 
things,  then  it  is  quite  time  to  establish  a  rule  of  public  law  which  shall 
not  only  instruct  them  but  forbid  their  further  practice  of  the  vicious 
system.  I  have  already  quoted  from  one  who  has  come  to  realize  that 
the  time  has  come  for  a  change.  The  fifth  section  of  the  bill  before  us 
will  establish  the  change  if  it  shall  become  the  law.  And  when  the 
change  shall  have  been  effected,  and  the  strong,  vigorous,  practical 
minds  in  direction  of  our  railroad  companies  get  down  to  the  dutiful 
work  of  reforming  the  abuses  which  they  have  too  long  fostered,  I  can 
but  believe  that  they  will  approve  the  wisdom  of  the  action  which  I  trust 
this  body  is  about  to  take. 

Mr.  President,  another  section  of  the  bill  deserves  special  notice.  It 
is  the  third,  and  reads  as  follows: 

Sec.  3.  That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of 
this  act  to  make  or  give  any  undue  or  unreasonable  preference  or  advantage  to  any  partic- 
ular person,  company,  firm,  corporation,  or  locality,  or  any  particular  description  of  traffic, 
in  any  respect  whatsoever,  or  to  subject  any  particular  person,  company,  firm,  corporation, 
or  locality,  or  any  particular  description  of  traffic,  to  any  undue  or  unreasonable  prejudice 
or  disadvantage  in  any  respect  whatsoever. 

This  section,  given  the  aid  of  the  others,  I  have  noticed  is  of  very 
great  practical  value.  It  asserts  the  doctrine  of  equality  to  which  I  re- 
ferred in  the  early  portion  of  my  remarks.  It  does  not  introduce  a  new 
principle  of  law.  It  merely  restates  the  old  doctrine  of  equal  rights, 
which  underlies  and  permeates  our  entire  civil  structure. 

Persons,  companies,  firms,  corporations,  localities,  and  traffics  are 
all  factors  of  our  civil  society,  and  each  is  entitled  to  equality  in  rights 
and  treatment,  so  necessary  to  the  maintenance  of  our  institutions. 
Neither  the  States  nor  the  General  Government  may  interfere  with  this 
equality.  Much  less  can  it  be  rightfully  interfered  with  by  the  instru- 
mentalities of  society  and  its  progress  created  by  public  law.    But  it  has 


INTER -STATE    COMMERCE    LAW.  49 

"been  interfered  with  by  the  railroad  corporations  in  respect  of  each  and 
every  one  of  the  matters  and  things  mentioned  in  this  section.  Nothing  has 
been  more  common  in  the  practices  of  the  railroad  companies  than  the  per- 
petration of  the  things  therein  denounced.  Preferences  and  advantages 
therein  prohibited  have  been  common  disbursements  by  the  railroad 
companies.  With  them  the  business  interests  of  persons,  firms,  com- 
panies, corporations,  and  localities  have  been  made  or  destroyed  at  will. 

The  special  rates,  rebates,  drawbacks,  and  devices  denounced  as  un- 
lawful by  the  second  section  of  the  bill  have  assured  prosperity  or 
enforced  disaster  in  instances  almost  be}rond  computation.  This  is  all 
wrong,  and  I  can  but  hope  that  we  have  reached  a  time  when  these 
things  are  to  cease  by  command  of  law;  and  it  is  a  cause  of  congratula- 
tion, and  will  so  be  regarded  by  the  people,  that  this  command  is  to  be 
enforced  by  penal  sanctions.  In  this  regard  the  tenth  section  of  the  bill 
is  comprehensive,  and  can  but  receive  general  pubHc  commendation. 
This  section  will  make  it  the  personal  interest  of  all  those  who  manage 
our  transportation  system  to  obey  the  law.  It  is  as  follows :  [See 
Sec.  X.] 

Taking  this  section  in  connection  with  the  others  I  have  noticed,  it 
seems  to  me  that  the  enactment  of  this  bill  will  assure  substantial  reforms 
in  the  respects  named,  and,  indeed,  I  ma}r  say  that  the  general  structure 
of  the  bill  gives  promise  of  an  effective  start  in  the  matter  of  regulating 
the  .great  subject  of  which  it  treats.  It  is  not  a  harsh  and  vindictive  bill" 
as  some  who  will  come  under  its  regulative  provision  in  the  event  of  its 
enactment  have  alleged.  In  some  respects  it  is  not  as  radical  as  I  would 
have  wished;  but  I  am  willing  to  try  it  as  it  is,  and  therefore  will  vote  for 
its  passage.  It  does  not  seem  to  me  that  it  will  work  the  harm  to  the 
proper  and  legitimate  interests  of  the  carrier  companies  of  the  country 
that  some  seem  to  fear  it  will.  No  one  can  be  helped  by  doing  injustice 
to  them.  Nor  do  the  people  ask  that  this  shall  be  done.  They  recognize 
the  helpful  aid  the  railroads  have  given  to  the  development  and  progress 
of  the  country,  but  they  insist  on  the  enactment  of  a  law  which  will  aid 
them  in  recovering  some  of  their  lost  rights.  They  are  willing  that  the 
railroad  companies  shall  prosper  and  be  reasonably  paid  for  their  service, 
but  they  will  not  recognize  them  as  masters,  for  they  know  that  they 
were  created  to  be  servants;  and  it  may  be  set  down  as  one  of  the  things 
irrevocably  resolved  upon  that  the  public  demand  which  has  induced  the 
presence  of  this  bill  here  will  not  cease  until  justice  shall  be  intrenched 
in  the  transportation  system  of  the  country. 

The  progress  made  toward  effecting  the  demand  of  the  people  for 
proper  regulative  legislation  does  not  seem  to  have  impressed  itself  in 
any  considerable  practical  degree  upon  the  minds  of  the  railroad  man- 
agers of  the  country.  They  have  thus  far  defeated  all  efforts  for  such 
legislation.  But  they  do  not  seem  to  have  improved  their  methods.  An 
illustration  of  this  statement  may  be  found  in  Iowa  at  this  time  relative 
to  the  agricultural  interests  of  the  State.  The  western  portion  of  the 
State  produced  a  large  corn  crop  this  year.  The  eastern  part  of  the  State 
had  a  very  light  yield  of  this  cereal.  The  result  is  that  corn  is  selling  at 
a  low  price  in  the  western  part  of  the  State.  The  farmers  in  the  eastern 
section  need  this  cheap  corn  to  feed  their  stock;  for  they  have  horses, 
cattle,  and  hogs  without  number. 


50  INTER -STATE    COMMERCE    LAW. 

Do  the  railroad  companies  take  these  facts  into  account  and  adjust 
their  rates  to  harmonize  with  these  exceptional  conditions?  Not  at  all. 
On  the  contrary  they  go  right  on  as  though  nothing  out  of  the  line  of 
ordinary  agricultural  events  had  transpired  in  Iowa,  On  the  16th  instant, 
corn  was  selling  in  Western  Iowa  at  from  20  cents  to  25  cents  per  bushel. 
In  Chicago  it  was  quoted  at  from  36f  cents  to  36J.  At  Ottumwa,  in 
Southeastern  Iowa,  the  price  was  40  cents  to  42  cents  per  bushel.  So 
that  Western  Iowa  corn  was  selling  in  Chicago  at  from  3  to  6  cents 
cheaper  per  bushel  than  the  Eastern  Iowa  farmer  could  buy  it  for  use  on 
his  farm;  and  these  conditions  have  existed  from  the  day  that  corn  crop 
matured  down  to  the  present  time. 

What  results  have  we  from  this  state  of  facts?  Why,  that  the  far- 
mers have  been  forced  to  sell  their  horses,  cattle,  and  hogs  in  a  depressed 
market,  and  at  whatever  prices  the}  could  get. 

From  Iowa  newspapers  I  learn  that  this  subject  was  brought  to  the 
attention  of  the  railroad  companies.  At  a  meeting  of  the  Live-Stock 
Breeders'  Association,  held  in  this  State,  the  subject  was  acted  on  by  the 
adoption  of  the  following  preamble  and  resolution,  namely: 

Whereas  on  account  of  the  unparalleled  drought,  the  farmers  in  Eastern  and  Central 
Iowa  have  a  surplus  of  stock,  while  Western  Iowa  and  Nebraska  have  a  surplus  of  corn; 
and 

Whereas  the  present  railroad  tariff  is  driving  to  Chicago  corn  that  is  greatly  needed 
at  home:  Therefore, 

Be  it  resolved*  That  we  respectfully  ask  the  railroads  running  through  Iowa  to  re- 
duce their  local  freight  rates,  that  farmers  may  be  able  to  obtain  grain  to  feed  out  their 
stock. 

This  action  has  produced  no  result.  Prices  range  at  about  the  same 
figures  I  have  already  stated,  and  the  depression  of  agricultural  interests 
continues,  and  this  in  face  of  the  fact  that  the  railroad  companies  could 
have  extended  relief  without  hurting  themselves.  If  they  had  given  the 
farmers  of  Eastern  Iowa  even  the  Chicago  rate  on  Nebraska  and  Western 
Iowa  corn,  they  would  have  tided  them  over  the  present  exceptional 
period  of  depression  and  loss.  Can  there  be  a  more  suggestive  illustra- 
tion of  the  absence  of  the  element  of  common  sense  in  business  man- 
agement than  these  facts  present?  But  this  is  only  one  illustration  out  of 
scores  and  even  hundreds  that  might  be  cited;  and  while  these  things  are 
practiced  we  may  be  sure  that  the  demand  for  regulative  legislation  will 
not  lower  its  tone  nor  reduce  its  exactions.  Let  us  give  the  response 
which  the  bill  of  the  conference  committee  presents. 


REMARKS  OF  MR.  PLATT. 
In  the  U.  S.  Senate  January  5,  1887. 

•Mr.  Platt.  (Conn.)  Mr.  President,  the  utterances  of  Senators  in  this 
Chamber  are  so  liable  to  be  misunderstood,  I  will  not  say  misrepre- 
sented, that  I  take  occasion  to  say  before  proceeding-  with  my  remarks, 
and  to  say  it  with  what  emphasis  I  may,  that  I  am  in  favor  of  legisla- 
tion for  the  regulation  of  the  business  of  the  railroads  of  the  country 
within  the  extreme  limits  of  the  Constitution,  which  I  understand  to  be 
for  the  regulation  of  that  portion  of  the  business  done  upon  the  rail- 
roads of  the  country  which  comes  within  the  definition  of  "interstate 
commerce."  I  wish  that  it  were  so  that  Congress  had  power  to  go  fur- 
ther in  the  subject  of  railroad  legislation. 

More  than  that,  I  am  in  favor  of  this  bill  with  one  exception.  I 
have  labored  earnestly,  with  what  diligence  I  might  conscientiously,  to 
endeavor  to  perfect  the  bill  and  to  assist  the  chairman  of  the  committee 
and  the  other  members  of  the  committee  in  coming  to  conclusions  upon 
this  subject,  and  I  am  ready  to  agree  with  the  report  of  the  conference 
committee  upon  all  the  points  except  the  one  to  which  I  shall  call  the 
attention  of  the  Senate. 

It  is  not  a  question  of  whether  we  shall  legislate  for  the  regulation 
of  interstate  commerce  transacted  by  railroads,  but  it  is  a  question  of 
how  we  shall  legislate.  It  is  a  vast  and  complicated  subject  that  we  deal 
with,  vaster  and  more  complicated,  I  think,  than  any  one  apprehends 
until  he  has  made  a  careful  and  exhaustive  study  of  the  subject.  The 
very  fact  that  there  were  moved  upon  the  railroads  of  the  United  States 
in  the  year  of  1885,  437,000,000  tons  of  freight,  a  very  large  proportion  of 
which,  I  suppose  60  per  cent,  at  least,  came  under  the  definition  of  in- 
terstate commerce,  the  fact  that  the  entire  receipts  of  the  railroads  of 
this  country  in  the  year  1885  were  $765,000,000,  a  sum  more  than  twice 
as  great  as  the  entire  income  of  the  Government,  of  which  $5 19, 000, 000 
were  from  freight  receipts  alone,  shows  how  vast  the  question  is.  How 
complicated  it  is  no  one  can  ever  know  except  those  who  have  been  prac- 
tically engaged  in  the  operation  of  railroads. 

The  basis  upon  which  we  must  legislate,  as  it  seems  to  me,  is  simple. 
The  justification  for  legislation  is  that  the  railroad  business,  unlike  other 
business,  is  of  a  mixed  nature.  It  is  partly  private  business  and  partly 
public  business.  I  think  that  we  should  refrain  as  far  as  possible  from 
legislating  to  effect  purely  private  business  in  this  country.  But  when 
a  private  business  is  "charged  with  a  public  use,"  as  the  phrase  is,  when 
the  railroad  undertakes  to  discharge  a  public  duty  as  well  as  to  conduct 
its  private  business,  it  is  eminently  proper  and  necessary  that  there 
should  be  legislation  to  make  sure  that  the  public  business  is  conducted 
for  the  public  welfare;  that  its  public  duty  is  faithfully  discharged,  and 
that  no  abuses  are  allowed  to  exist. 

I  said  the  basis  of  legislation  was  simple.  It  should  be  the  enforce- 
ment of  the  common  law — that,  and  nothing  more.     Congress  may  not 

51 


52  INTER-STATE    COMMERCE    LAW. 

justify  itself,  in  my  judgment,  in  stepping  outside  of  the  well-defined 
principles  of  the  common  law  in  legislation.  Those  principles  affecting 
interstate  railway  business  have  had  a  growth  of  centuries.  They  pro- 
vide the  remedy  for  every  difficulty  which  can  arise  in  the  operation  of 
railroads.  The  application  of  those  principles  to  every  evil  or  abuse 
which  can  be  charged  against  railroads  and  railroad  corporations  will 
solve  the  difficulty  and  remedy  the  evil.  The  difficulty  is  simply  in  the 
application. 

So  then,  I  think,  we  should  confine  our  legislation  to  the  enforce- 
ment of  the  common  law.  That  is  simple.  It  is  only  this;  it  can  be 
expressed  in  a  word.  The  rates  charged  by  the  common  carriers  must  be 
reasonable,  and  such  carriers  must  only  charge  like  rates  for  like  serv- 
ices. That  is  all.  It  has  been  the  intention  of  this  committee  to  confine 
legislation  within  these  limits.  A  careful  study  of  the  bill  as  it  was 
passed  by  the  Senate  will  show  that  we  did  not  go  outside  of  those 
limits,  that  we  undertook  to  make  no  new  law  for  the  regulation  of  rail- 
roads and  the  business  of  railroads  and  interstate  commerce  in  this 
country,  but  that  we  did  undertake  to  hold  the  railroad  management  of 
this  country  up  to  the  strict  letter  of  the  common  law. 

We  did  this  intentionally.  We  did  it  because  in  the  light  of  expe- 
rience in  this  and  other  countries  we  believed  that  that  was  the  best 
method  of  dealing  with  the  railroad  problem,  because  those  State  Leg- 
islatures which  had  legislated  thus  and  stopped  there  had  done  most 
toward  a  favorable  and  satisfactory  solution  of  the  railroad  problem  in 
the  States.  For  instance,  all  the  legislation  of  the  State  of  Massachu- 
setts upon  this  subject  is  to  be  found  in  a  single  statute  which  is  in  chap- 
ter 225  of  the  acts  of  May  1G,  1882.  I  read  it.  It  is  an  amendment  to  a 
former  statute  which  imposed  penalties  for  violations  of  the  common 
law.     It  is  this: 

Section  i.  Chapter  94  of  the  acts  of  the  year  1882  is  amended  by  striking  out  the 
first  and  second  sections  thereof  and  inserting  instead  the  following  words  :  "No  railroad 
company  shall  in  its  charges  for  the  transportation  of  freight  or  in  doing  Us  freight  business 
make  or  give  any  undue  or  unreasonable  preference  or  advantage  to  or  in  favor  of  any  per- 
son, firm  or  corporation,  nor  subject  any  person,  firm,  or  corporation  to  any  undue  or  un- 
reasonable prejudice  or  disadvantage.1' 

That  and  a  short-haul  law  upon  which  largely  the  short-haul  provision 
of  the  Senate  bill  was  modeled,  and  a  single  statute  in  relation  to  the 
transportation  of  milk,  is  all  the  remedial  legislation  which  has  been  re- 
sorted to  in  the  State  of  Massachusetts. 

In  addition  to  that  they  have  a  railroad  commission.  That  commis- 
sion has  very  little  power.  It  has  power  to  hear  complaints  and  to  make 
report  to  the  attorney  general  of  the  state  and  to  the  legislature.  That 
simple  legislation  has  been  found  to  be  the  most  effective  state  legislation 
in  the  United  States,  and  it  is  in  that  state  where  the  legislation  has  been 
most  simple,  where  it  has  been  strictly  confined  to  a  declaration  and  en- 
forcement of  the  common  law,  where  the  fewest  complaints  against  rail- 
roads now  exist.  It  is  in  those  states  which  have  legislated  most  severely 
and  rigidly  where  the  most  numerous  complaints,  and  in  my  judgment 
the  best  founded  complaints  of  railroad  abuses  now  exist. 

The  committee  believed  that  it  was  not  best  in  experimental  legisla- 
tion to  go  too  far,  for  this  legislation  is  experimental.  They  believed 
that  it  was  unwise  to  attempt  to  prescribe  a  remedy  for  every  alleged 


IXTER-  STATE    COMMERCE    LAW.  53 

abuse  in  railroad  management  by  specific  legislation,  by  bard  and  fast- 
iron-bound  statutes  applying  tbereto.  I  think  the  committee  were  right, 
and  therefore  I  have  great  pleasure  in  standing  by  the  committee  bill 
with  the  single  exception  to  which  I  am  to-day  to  call  the  attention  of  the 
Senate. 

The  discussion  upon  this  bill  is  narrowed  to  two  issues,  and  I  think 
the  committee  aud  the  Senate  may  be  congratulated  that  the  work  of  the 
committee  has  been  practically  adopted  by  both  branches  of  the  national 
legislature,  with  the  exception  of  these  two  topics  which  still  excite  dis- 
cussion. These  two  questions  are,  first,  whether  the  Senate  will  adopt 
the  modification  proposed  by  the  conference  committee  in  the  short-haul 
section,  and,  second,  will  it  prohibit  pooling  instead  of  leaving  it  for  the 
present  to  the  investigation  of  the  commission. 

Now  that  these  two  issues  come  clearly  before  the  Senate,  I  wish  to 
put  in  juxtaposition,  side  by  side,  the  provisions  of  the  Senate  bill  and 
the  provisions  of  the  bill  recommended  by  the  conference  committee 
upon  these  topics.  First,  I  read  the  short-haul  clause  of  the  Senate  bill, 
section  4: 

Sec.  4.  That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of 
this  act  to  charge  or  receive  any  greater  compensation  in  the  aggregate  for  the  transporta- 
tion of  passengers,  or  of  like  kind  of  property,  under  substantially  similar  circumstances  or 
conditions,  for  a  shorter  than  for  a  longer  distance,  over  the  same  line,  in  the  same  direc- 
tion, and  from  the  same  original  point  of  departure,  01  to  the  same  point  of  arrival ;  but 
this  shall  not  be  construed  as  authorizing  any  common  carrier  within  the  terms  of  this  act 
to  charge  and  receive  as  great  compensation  for  a  shorter  as  for  a  longer  distance  ;  pro- 
vided, however,  that  upon  application  to  the  commission  appointed  under  the  provisions  of 
this  act,  such  common  carrier  may,  in  special  cases,  be  authorized  to  charge  less  for 
longer  than  for  shorter  distances  for  the  transportation  of  passengers  or  property  ;  and  the 
commission  m:iy  from  time  to  time  make  general  rules  exempting  such  designated  common 
carrier  in  such  special  cases  from  the  operation  of  this  section  of  this  act ;  and  when  such 
exceptions  shall  have  been  made  and  published  they  shall,  until  changed  by  the  commis- 
sion or  by  law,  have  like  force  and  effect  as  though  the  same  had  been  specified  in  this 
section. 

That  is  all  there  is  of  it  except  the  penalty  clause,  which  appears  else- 
where in  the  conference  bill.     The  section  in  the  conference  bill  is  this: 

Sec.  4.  That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  -.provisions  of 
this  act  to  charge  or  receive  any  greater  compensation  in  the  aggregate  for  the  transporta- 
tion of  passengers  or  of  like  kind  of  property,  under  substantially  similar  circumstances 
and  conditions,  for  a  shorter  than  for  a  longer  distance  over  the  same  line,  in  the  same 
direction,  the  shorter  being  included  within  the  longer  distance. 

It  will  be  seen  that  those  words  have  been  substituted  for  the  words 
"and  from  the  same  original  point  of  departure  or  to  the  same  point  of 
arrival." 

But  this  shall  not  be  construed  as  authorizing  any  common  carrier  within  the  terms  of 
this  act  to  charge  and  receive  as  great  compensation  for  a  shorter  as  for  a  longer  distance  ; 
provided,  however,  that  upon  application  to  the  commission  appointed  under  the  provis- 
ions of  this  act,  such  common  carrier  may,  in  special  cases,  after  investigation  by  the  com- 
mission, be  authorized  to  charge  less  for  longer  than  for  shorter  distances  for  the  trans- 
portation of  passengers  or  property  ;  and  the  commission  may  from  time  to  time  prescribe 
the  extent  to  which  such  designated  common  carrier  may  be  relieved  from  the  operation  of 
this  section  of  this  act. 

The  main  change,  as  will  be  seen,  recommended  by  the  conference 
committee  is  as  I  have  indicated,  the  striking  out  in  the  Senate  bill  of  the 
words  ' '  and  from  the  same  original  point  of  departure  or  to  the  same 
point  of  arrival,"  and  substituting  therefor  the  words  "the  shorter  being 
included  within  the  longer  distance." 


54  INTER -STATE    COMMERCE    LAW. 

Now,  I  read  the  Senate  bill  provision  with  regard  to  the  subject  of 
pooling.     It  is  simply  this  : 

Sec.  19.  That  the  said  commission  shall  specially  inquire  into  that  method  of  railroad 
management  or  combination  known  as  pooling,  and  shall  report  to  Congress  what,  if  any, 
legislation  is  advisable  and  expedient  upon  that  subject. 

I  read  next  the  section  in  the  bill  proposed  by  the  conference  com- 
mittee on  the  subject  of  pooling  : 

Sec  5.  That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of 
this  act  to  enter  into  any  contract,  agreement,  or  combination  with  any  other  common 
carrier  or  carriers  tor  the  pooling  of  freights  of  different  and  competing  railroads,  or  to  di- 
vide between  them  the  aggregate  or  net  proceeds  of  the  earnings  of  such  railroads,  or  any 
portion  thereof,  and  in  any  case  of  an  agreement  for  the  pooling  of  freights  as  aforesaid, 
each  day  of  its  continuance  shall  be  deemed  a  separate  offense. 

Elsewhere  in  the  bill  it  is  provided  that  the  commission  of  any  act 
which  it  is  provided  shall  be  unlawful  may  be  punished  by  a  fine  not 
exceeding  $5,000. 

Now,  with  regard  to  the  change  in  the  short-haul  clause,  I  have  this 
to  say  :  I  do  not  think  as  an  original  proposition  the  change  was  a  wise 
one  I  do  not  think  it  is  an  improvement  of  the  bill  as  it  left  the  Senate. 
I  think  the  Senate  bill  recognized  a  principle  which  was  sound,  and  that 
principle  was  that  the  question  of  what  is  a  reasonable  charge  upon 
freight  to  a  station  or  from  a  station  is  not  to  be  determined  by  the  ques- 
tion of  what  is  charged  for  freight  to  or  from  another  station.  In  other 
words,  the  question  of  reasonable  freight  charges  must  vary  with  the 
location  of  the  place  to  or  from  which  the  freight  is  shipped,  the  volumt 
and  character  of  the  business  to  be  transacted  going  to  and  from  that 
place.  I  believe  that  was  a  wise  provision  based  upon  a  sound  principle, 
and  I  do  not  think  it  was  wise  to  depart  from  it ;  and  I  think  that  these 
words  which  have  been  inserted  about  the  shorter  distance  being  included 
within  the  longer  distances  are  uncertain  and  ambiguous.  I  do  not  think 
any  man  knows  to-day  what  they  do  mean.  I  think  it  will  greatly  trouble 
courts  and  commission  to  decide  what  they  mean. 

It  is  certain  that  the  introduction  of  these  words  makes  an  exception 
to  the  rule  It  is  certain  that  the  bill,  as  it  stands  reported  by  the  con- 
ference committee,  implies  that  there  are  some  shorter  distances  for  which 
more  may  be  charged  than  for  longer  distances.  It  is  for  courts  and  the 
commission  to  find  out  what  those  shorter  distances  are,  for,  mathe- 
matically speaking,  every  shorter  distance  is  included  within  the 
longer  distance.  But  this  bill  says  on  this  subject  that  it  shall  not  be 
lawful  to  charge  more  on  the  same  line  in  the  same  direction,  under  simi- 
lar conditions  and  circumstances,  for  a  like  kind  and  amount  of  freights, 
for  the  shorter  than  for  the  longer  distance  which  includes  the  shorter. 
Mathematically  speaking,  we  should  say  that  was  impossible.  Speaking 
of  the  words  when  put  into  a  statute,  we  know  they  must  have  a  con- 
struction. I  have  never  yet  seen  the  man  who  was  able  to  sa}r  what  those 
shorter  distances  were  in  which  railroads  were  to  be  permitted  to  charge 
more  than  for  longer  distances.  They  are  there  in  the  bill  if  it  passes, 
and  the  courts  here  will  say  what  they  mean. 

But,  notwithstanding  all  this,  I  stand  by  the  short-haul  clause  for  the 
purpose  of  getting  legislation  on  this  subject.  I  am  willing  to  surrender 
so  far  my  judgment  as  to  what  is  wise  and  best.     Right  here  I  want  to 


INTER -STATE    COMMERCE    LAW.  55 

allude  to  an  objection  based  upon  a  possible  construction  which  I  have 
heard  urged  against  this  short-haul  clause. 

I  am  told  that  there  is  fear  in  many  quarters  that  this  construction 
will  be  put  upon  it ;  that  where  two  or  more  independent  lines  of  rail- 
road (independent  in  ownership  and  operation)  contract  with  each  other 
to  forward  freight  over  the  entire  line  so  made  up,  and  for  each  inde- 
pendent link  the  railroad  company  owning  and  operating  it  to  accept  a 
certain  proportion  of  the  through  freight  as  its  share,  that  portion 
which  it  so  agrees  to  accept  under  these  circumstances  will  be  made  the 
measure  of  the  charge  upon  freight  shipped  over  its  own  road  or  ap- 
portion of  it.    I  do  not  think  that  such  can  be  the  construction  of  the  bill. 

Every  road  must  stand  by  itself.  It  is  upon  the  company's  own 
road  that  the  short-haul  clause  takes  effect.  If  a  number  of  independent 
companies,  having  independent  lines  which  together  form  a  continuous 
through  route,  contract  as  to  the  freights  which  shall  go  over  those 
routes,  then  they,  as  contracting  parties,  are  bound  as  to  freight  which 
is  shipped  over  those  roads  as  to  the  price,  and  may  not  charge  more  on 
freight  sent  under  contract  between  those  points  for  the  shorter  than  for 
the  longer  distance;  but  the  share  which  each  road  may  receive  for 
carrying  such  through  freight  does  not,  in  my  judgment,  furnish  the 
measure  by  which  any  one  of  those  independent  and  independently- 
operated  companies  is  to  measure  the  rate  for  other  freight  upon  its  own 
road. 

I  have  said  this  much  to  explain  the  fact  that,  although  I  do  not 
think  wTe  have  improved  the  Senate  bill  on  this  subject,  1  still  take  it  and 
stand  by  it. 

But  the  section  of  the  bill  proposed  by  the  conference  committee 
which  prohibits  pooling  under  criminal  penalties  I  can  not  consent  to. 
I  would  for  the  sake  of  getting  legislation  assent  to  it  if  I  did  not  be- 
lieve in  my  inmost  mind  that  it  was  impolitic,  unjust,  and  calculated  to 
embarrass  and  possibly  defeat  the  beneficial  operation  of  the  bill. 

I  do  not  think  that  to  justify  my  dissent  I  must  hold  affirmatively 
that  pooling  contracts  are  legal  and  right.  I  think  the  burden  of  proof 
is  upon  them  who  would  make  such  contracts  criminal.  Can  it  be  that 
in  the  Senate  of  the  United  States  and  in  the  House  of  Representatives 
of  the  United  States  crimes  are  to  be  made  and  penalties  of  $5,000  a 
day  are  to  be  inflicted,  and  the  parties  who  propose  it  are  not  show  why 
the  contracts  for  which  those  fines  are  imposed  are  illegal  or  wrong? 
And  to  give  reasons  why  I  can  not  assent  to  such  legislation,  must  I 
prove  affirmatively  that  such  contracts  are  right  and  are  according  to  the 
common  law?  It  is  for  those  who  say  that  pooling  between  railroads 
shall  be  criminal  to  show  that  such  arrangements  are  either  opposed  to 
the  common  law,  condemned  by  the  common  law,  or  they  are  so  far 
wrong  in  principle  as  being  opposed  to  public  policy  that  it  is  just  and 
wise  legislation  to  make  them  criminal  offenses. 

Mr.  President,  we  must  get  back  to  definitions.  I  apprehend  that 
these  contracts,  which  are  known  as  pooling  contracts,  are  entirely  mis- 
understood in  character,  in  purpose,  in  results,  and  it  is  the  evil  signifi- 
cance which  attaches  to  this  unfortunate  word  "pool,"  which  railroads 
never  apply  to  these  contracts,  which  has  created  an  unreasonable  preju- 
dice in  the  minds  of  the  people  of  the  country,  upon  which  it  is  sup- 


56  INTER- STATE    COMMERCE    LAW. 

posed  that  without  investigation  and  without  affirmatively  showing  any- 
thing wrong  or  improper  in  these  contracts,  we  are  to  brand  the  making 
of  them  as  criminal.  It  is  said  that  "that  which  we  call  a  rose  by  any 
other  name  would  smell  as  sweet,"  but  the  converse  of  that  proposition 
does  not  hold  true.  These  contracts  under  other  names  would  never  be 
supposed  to  be  against  the  public  interest.  Railroad  companies  have 
tried  to  escape  from  the  fateful  influence  of  that  name.  They  have 
called  such  contracts  what  they  more  properly  are — co-operation  con- 
tracts for  traffic  unity — but  without  avail;  that  unfortunate  name  is 
fastened  upon  these  contracts.  But  I  do  not  propose,  therefore,  to  strike 
at  what  can  not  be  shown  to  be  wrong,  improper,  or  against  the  public 
welfare  or  opposed  to  public  policy. 

What  is  a  pool?  What  is  a  pooling  contract?  It  is  simply  an  agree- 
ment between  competing  railroads  to  apportion  the  competitive  business; 
that,  and  nothing  more  I  repeat  it;  it  is  an  agreement  between  com- 
peting railroads  to  apportion  the  competitive  business.  It  does  not  touch 
the  local  business,  it  does  not  reach  it;  it  has  no  reference  to  it.  The 
local  business  is  left  to  each  individual  company.  It  is  non-competitive. 
A  pool  has  nothing  to  do  per  se  with  making  rates. 

And  right  here  I  want  to  call  attention  to  a  glaring  inconsistency  in 
this  proposed  legislation.  The  proposed  prohibition  of  pooling  does  not 
prohibit  the  railroad  companies  from  making  rates.  Indeed  the  whole 
bill  compels  agreements  between  competing  roads  for  the  making  of  rates. 
The  section  does  not  propose  to  prohibit  a  hard  and  fast  agreement  be- 
tween railroads  to  maintain  rates.  Indeed  it  almost  compels  it.  It  does 
not  propose  to  interfere  with  any  other  means  which  railroads  may  adopt, 
which  are  inducements  to  the  railroads  themselves  to  maintain  rates. 
All  that  it  does  propose  to  do  is  to  make  criminal  the  apportionment  of 
freight  between  competing  railroads,  or  the  division  of  earnings  by  com- 
peting railroads.  With  that  criminal  clause  in  the  bill,  it  would  still  be 
open  to  railroads  to  enter  into  any  other  kind  of  contracts  which  they 
might  invent  for  the  purpose  of  maintaining  rates  agreed  upon.  It 
would  be  open  to  competing  roads  to  put  a  sum  of  money  in  the  hands 
of  a  commissioner  or  an  arbitrator  to  be  used  as  penalties,  as  liquidated 
damages  to  be  recovered  by  the  other  companies  of  any  compan}^  that 
should  violate  the  agreement  to  maintain  rates.  It  does  not  apply  to  a 
hundred  means  by  which  railroad  companies  may  in  some  way  make  it 
for  their  interest  to  maintain  the  rates  which  they  themselves  have  fixed 
and  have  agreed  to  maintain  legally  under  this  bill.  Is  it  not  pretty 
remarkable  legislation  that  there  should  be  left  the  right  of  competing 
roads  to  fix  rates  jointly  for  competitive  business  ;  that  there  should  be 
left  the  right  to  agree  to  maintain  those  rates  and  not  to  cut  or  vary 
from  them  ;  that  there  should  be  left  free  to  them  every  means  to  pro- 
tect themselves  against  the  violation  of  those  agreements,  except  just  this 
matter  or  apportioning  between  them  the  competitive  business  of  the 
roads  or  the  division  of  joint  earnings  ? 

It  may  be  said  that  perhaps  it  is  not  so  bad  a  measure  after  all  if  it 
leaves  all  those  things  open  to  the  railroads,  but  the  inconsistency  of  it  is 
intensified  many  times. 

I  say,  then,  that  the  thing  which  it  is  proposed  to  make 
criminal  is  contracts  for  the  pooling  of  freights  of  different  and  competi- 


INTER -STATE    COMMERCE    LAW.  57 

tive  railroads  or  the  division  between  them  of  the  aggregate  or  net  pro- 
ceeds of  the  earnings  of  such  railroads.  Now,  I  want  to  read  a  word 
from  Mr.  Nimmo's  report,  which  is  called  the  report  on  the  internal 
commerce  of  the  United  States  in  1879,  showing  what  a  pool  really  is. 
And  I  want  to  say  a  word  about  Mr.  Nirnrno,  whom  I  shall  frequently 
quote  during  this  discussion  ;  I  shall  not  quote  railroad  presidents,  with 
a  single  exception  or  two  ;  I  shall  not  quote  pool  commissioners  ;  I  pro- 
pose to  fortify  what  I  have  to  say  on  this  subject  by  quotations  from 
men  who  have  studied  this  question  from  an  independent  standpoint  and 
with  no  interest  to  favor  railroads.  Mr.  Nirnrno,  Chief  of  the  Bureau 
of  Statistics  until  1884,  an  able  statistician  and  a  careful  student  of 
political  problems,  who  in  the  nice  adjustment  of  offices  to  civil  service 
reform  principles  by  the  present  administration  was  asked  to  make  way 
for  another  man.  Mr.  Nimmo  is  certainly  good  authority  by  reason 
of  the  attention  which  he  has  given  to  this  subject.  As  far  back  as  1879 
he  said  : 

The  use  of  the  term  "pool ''  as  a  designation  of  the  agreements  entered  into  between 
railroad  companies  for  the  apportionment  of  traffic,  or  the  receipts  from  traffic,  is  of  recent  . 
a  plication.  The  term  has  usually  been  applied  to  a  game  of  chance^  in  which  all  the 
players  contribute  towards  making  up  the  stake  or  pool,  and  the  winner  in  the  game  gets 
the  whole,  whereas  what  is  now  known  as  a  railroad  "pool"  is  simply  an  agreement  en- 
tered into  between  companies  for  the  apportionment  or  division  of  the  traffic  between  roads 
engaged  in  competitive  traffic.  By  this  arrangement  they  take  no  chance,  but  seek  to 
escape  the  chances  that,  under  unrestrained  competition,  they  may  be  able  to  secure  less 
than  what  they  deem  to  be  their  equitable  share  of  traffic  and  reduce  to  a  certainty 
the  share  of  the  traffic  whi  h  they  -hall  secure.  The  main  object,  however,  is  to  avoid 
the  great  losses  inevitably  resulting  from  wars  of  rates.  In  its  application  to  the  appor- 
tionment of  division  of  railroad  traffic  the  meaning  of  the  word  "  pool  "  appears  to  be, 
in  a  double  sense,  the  reverse  of  its  ordinary  significance  in  its  application  to  games  of 
chance. 

Again,  in  1881,  he  said  : 

A  railroad  freight  pool  is  simply  an  agreement  that,  at  competing  points,  the  several 
contestants  for  traffic  shall  be  allowed  a  certain  percentage  of  it,  or  of  the  receipts  there- 
from, to  be  determined  either  by  arbitration  or  by  a  convention  of  the  representatives  of  all 
the  competing  roads.  When  such  an  agreement  is  faithfully  observed,  it  is  found  to  be 
comparatively  an  easy  matter  to  decide  as  to  the  rates  which  shall  be  cha.ged  and  to 
maintain  them. 

Sometimes  the  same  authority  agrees  upon  and  fixes  the  rates,  and 
sometimes  it  does  not;  the  same  authority  which  apportions  or  divides 
the  traffic.  The  maintenance  of  rates  is  in  no  sense  per  se  part  of  the 
pooling  contract,  and  it  is  not  so  treated  in  the  bill,  as  I  have  shown,  h 
is  not  so  treated  in  the  bill  which  prohibits  and  makes  criminal  only  a 
thing  independent  of  and  distinct  from  the  making  of  rates  and  the  agree 
ing  to  maintain  them. 

Now  I  call  attention  for  a  moment  to  Judge  Cooley's  explanation  of 
a  pool,  which  is  to  be  found  upon  page  2  of  a  recent  pamphlet  by  Judge 
Cooley  in  1884,  entitled  "  Popular  and  Legal  Views  of  Traffic  Pooling." 
He  says: 

In  this  country  the  method  of  pooling  seems  to  be  for  the  several  contracting  parties 
to  create  some  common  authority  upon  which  will  be  conferred  the  power  to  establish  and 
change  rates  for  the  transportation  of  property  within  a  certain  territory  or  over  a  certain 
line,  and  also  to  apportion  the  business  between  them.  The  apportionment  will  be  made 
upon  a  consideration  of  what  the  companies  severally  would  be  likely  to  obtain  under  the 
operation  of  free  competition,  and  it  will  be  changed  from  time  to  time  if  found  to  be  rela- 
tively unjust.  The  feature  of  arbitration  upon  controversies  arising  between  the  contract- 
ing parties  will  also  be  prominent  in  the  arrangement. 


58  IXTER- STATE    COMMERCE    LAW. 

The  avowed  purpose  in  pi  >Iin^  is  to  avoid  ruinous  competition  between  the  several 
roads  represented,  and  the  unjust  discrimination  between  shippers  which  is  found  invari- 
ably to  attend  such  competition. 

Would  jTou  believe  that  in  a  bill  largely  and  mainly  aimed  at  the 
prevention  of  unjust  discrimination  a  clause  would  be  found  making 
criminal  that  practice  to  which  railroad  companies  have  resorted  to  pre- 
vent unjust  discrimination? 

A  pooling  contract  is  based— that  is  to  say,  the  percentage  of  freights 
or  the  portion  of  freights  which  each  company  agrees  to  be  satisfied 
with — is  based  upon  the  results  of  traffic  for  several  years  under  free 
competition;  and  it  is  a  strange  thing  that,  however  fierce  the  competi- 
tion, the  amount  of  competitive  traffic  which  a  road  secures  remains  prac- 
tically the  same;  whether  competition  be  fierce  or  whether  there  be  little 
competition,  the  amount  of  traffic  which  a  competing  road  secures  is 
practically  the  same.  This  apportionment  of  traffic,  then,  is  based  upon 
what  returns  for  some  years  under  open  competition,  when  competition 
has  been  fierce  and  when  it  has  not  been  fierce,  have  been  secured  by 
each  competing  road. 

The  fact  to  which  I  have  alluded  shows  that  there  is  for  every  com 
peting  railroad  its  natural,  normal  share  of  the  competitive  business, 
business  which  will  come  to  it  whatever  the  competition  may  be.  A 
competing  railroad  company  ma}r  be  justified  in  saying  that  such  share 
of  the  competitive  business  belongs  to  it  so  long  as  it  maintains  only  rea- 
sonable rates  for  doing  it.  It  is  upon  that  theory  that  the  apportionment 
is  made.  If  it  constitutes  an  agreement  for  the  prevention  of  competi- 
tion, for  non-competition,  it  is  this,  that  the  railroad  company  will  not 
fight  for  more  than  its  natural  share  of  the  business.  Its  object  is,  as  I 
have  shown  by  the  quotation  from  Judge  Cooley,  to  remove  the  induce- 
ment which  exists  for  railroads  to  enter  into  ruinous  competition  or  into 
unnatural  strife  for  business  which  does  not  belong  to  them. 

It  may  be  said  that  the  purpose  of  pooling  is  to  maintain  and  estab- 
lish equal  and  stable  rates.  What  is  this  bill  for?  What  has  been  the 
purpose  of  the  committee  in  this  bill?  They  have  heard  from  all  over 
this  land  that  one  of  the  chief  and  greatest  causes  of  complaint  against 
railroads  was  the  fluctuation  of  rates,  rates  which  were  up  to-day  and 
down  to-morrow,  up  for  the  retailer  and  down  for  the  wholesaler,  and 
fluctuating  up  or  down  as  the  caprice  of  the  railroads  or  the  emergencies 
of  the  competitive  strife  should  require.  Look  at  the  report  of  the  com- 
mittee, look  at  the  testimony  before  the  committee,  and  you  find  that  one 
of  the  main  objects  of  this  bill  is  to  make  rates  stable  and  permanent 
when  they  have  been  found  to  be  reasonable.  I  challenge  any  man  to 
show  that'the  object  or  purpose  or  faithful  observance  of  a  pooling^  con- 
tract—  by  which  I  mean  the  apportionment  of  the  competitive  traffic,  or 
of  the  earnings  derived  from  such  competitive  traffic  —  can  be  anything 
else  except  the  maintenance  of  stable  rates.  It  is  supposed,  I  think,  on 
the  part  of  the  public,  that  in  some  way  these  railroad  pools  fix  unrea- 
sonable rates. 

I  challenge  proof  of  it.  I  heard  petitions  presented  at  that  desk 
this  morning  praying  for  the  passage  of  this  bill.  For  what  pur- 
pose? To  prevent  excessive  rates,  discriminations,  and  pooling.  It 
shows  the  utter  and   lamentable   ignorance   of   what  pooling  contracts 


INTER -STATE    COMMERCE    LAW.  59 

really  are.  There  is  not  a  man  who  ever  studied  them,  there  is  not  a 
man  who  ever  investigated  their  operation,  but  what  will  tell  you  that  the 
main  purpose  of  them  is  to  prevent  discriminations;  and  yet  here  we  have 
a  hill  in  which  we  propose  to  make  criminal  the  means  which  the  railroad 
companies  adopt  to  prevent  discrimination.  Others  may  agree  to  it  for 
the  sake  of  getting  legislation;  I  will  not. 

I  know  this  is  no  place  to  discuss  a  legal  question  thoroughly  and 
exhaustively,  but  I  say  the  advocates  of  the  prohibition  of  pooling  can 
not  maintain  that  these  contracts  are  objectionable  under  the  common  law, 
certainly  not  that  they  are  illegal  at  common  law;  nay,  more,  I  would 
with  confidence  stand  before  the  Supreme  Court  of  the  United  States,  or 
the  supreme  court  of  any  of  the  great  States  of  this  country,  and  under- 
take to  maintain  that,  one  thing  being  assumed,  such  contracts  are  legal 
and  would  be  enforced  by  the  courts,  and  that  one  thing  to  be  assumed 
is  that  the  rates  shall  be  reasonable. 

A  pooling  contract,  a  contract  to  apportion  between  competing  roads 
the  competitive  business  for  which  reasonable  rates  have  been  agreed 
on  I  undertake  to  say,  in  my  judgment,  will  be  held  valid  at  common  law. 

I  am  not  unmindful  of  the  general  principle  that  contracts  in  restraint 
of  trade  are  held  to  be  illegal;  that  is,  in  the  sense  that  they  will  not  be 
enforced  by  the  courts.  I  am  not  unmindful  of  the  fact  that  combina- 
tions wholly  to  prevent  competition  in  trade  Would  be  held  illegal  by  the 
courts  to  the  extent  that  they  would  not  be  enforced,  that  courts  would 
say  to  the  parties  to  such  contracts,  "  These  are  voluntary  agreements  of 
yours;  you  can  get  no  sanction  from  the  courts,  because  wc"  think  they 
are  against  public  policy."  That  is  what  is  meant  when  it  is  said  such 
contracts  are  illegal. 

But  contracts  in  partial  restraint  of  trade  have  been  held  to  be  valid 
for  the  last  one  hundred  and  sixty  years  in  all  the  courts  of  England 
and  America,  And  I  hold  that  combinations  for  the  partial  prevention 
of  competition  are  governed  by  the  same  rules  as  govern  contracts  for 
the  restraint  of  trade,  and  that  contracts  only  for  the  partial  restraint  of 
competition  will  never  be  declared  to  be  illegal  and  void  unless  it  clearly 
appears  that  they  are  injurious  to  the  public  interest.  The  law  of  this 
country  is  well  stated  by  the  commentator  in  Smith's  Leading  Cases, 
commenting  on  the  great  case  of  Mitchell  r.  Reynolds,  decided,!  think. 
in  1711,  thus: 

The  present  doctrine  is  that  while  contracts  in  total  restraint  of  trade  are  void,  yet  it 
the  restraints  imposed  be  partial,  reasonable,  and  founded  on  good  consideration  they  are 
valid  and  will  be  enforeed. 

And  Judge  Bradley,  of  the  Supreme  Court  of  the  United  States, 
held  in  that  very  same  language,  in  a  case  reported  in  20  Wallace,  that 
that  was  the  doctrine  of  the  common  law  as  it  exists  in  this  countiy. 
You  can  not,  therefore,  jump  to  the  conclusion,  because  a  contract  for 
the  division  and  apportionment  of  freights  between  competing  roads 
may  in  some  sense  to  some  extent  regulate  or  limit  competition,  that  it  is 
illegal.  I  undertake  to  say  that,  with  the  exception  of  one  or  two  cases 
to  which  I  will  allude,  in  this  country  there  can  not  be  a  case  found 
where  such  contracts  have  been  held  to  be  illegal  unless  they  were  for  the 
total  prevention  of  trade  within  certain  limits,  or  unless  they  related  to 
the  control  of  a  production  like  coal  or  iron,  as  well  as  the  carrying  of 


60  INTER -STATE    COMMERCE    LAW. 

the  same.     It  depends  on  whether  the  prevention  aimed  at  is  total, 
unreasonable  and  injurious. 

As  I  said,  the  common  law  of  England  certainly  is  that  such  con- 
tracts are  legal.  The  common  law  of  England  and  America  is  the  same. 
And  yet  the  English  courts,  law  and  chancery,  each  hold  just  such  con- 
tracts as  it  is  proposed  to  declare  illegal  and  criminal  to  be  valid,  and 
enforce  them ,  I  want  to  put  this  question  to  the  Senate  of  the  United 
States:  England  has  had  as  much  experience  in  railroads  as  we  have  ;  it 
has  had  the  experience  of  thirty  years  of  legislation;  it  has  experienced 
all  the  evils;  it  has  tried  all  the  evils;  it  has  tried  all  the  remedies  for 
abuses;  and  does  the  Senate  of  the  United  States  propose  deliberately 
to-day  to  say  that  arrangements  which  English  courts  with  all  this  expe- 
rience hold  be  legal  and  valid  shall  subject  the  parties  practicing  them  to 
criminal  penalties  of  .$5,000  a  day?  I  cite  from  the  last  legal  treatise  on 
railway  law,  Wood's  Railway  Law,  volume  1,  published  in  1885.  The 
author  is  an  approved  law-writer,  both  in  this  and  other  branches^of  the 
law.     I  read  from  section  207,  page  590: 

Sec.  207.  Pooling  arrangements.  In  England  it  is  held  that  "  pooling  "  contracts,  or 
arrangements  between  competing  roads  by  which  they  agree  to  divide  their  joint  earnings 
upon  certain  classes  of  business,  or  even  their  entire  earnings,  aie  legal  and  valid,  where 
it  does  not  appear  that  she  interests  of  shareholders  or  of  the  public  are  prejudiced 
thereby.  But  the  English  authorities  upon  many  questions  conrected  with  railway  law 
are  hardly  safe  guides  upon  similar  questions  in  this  country,  for  the  reason  that  their  rail- 
way system  is  essentially  different  from  ours,  and  such  companies  are  under  the  direct  and 
immediate  supervision  of  a  court  of  railway  commissioners,  which  by  statute  is  invested 
with  authority  to  hear  complaints  and  make  orders  which  relieve  the  public  against  any 
particular  oppression  or  illegal  action  of  the  companies;  yet  upon  this  question  such 
authorities  are  entitled  to  weight,  because  they  are  predicated  upon  the  common  law,  and 
not  upon  statutory  grounds. —  Wood's  Railway  Law^  /,  page  590. 

The  two  leading  cases  in  which  the  English  courts  held  that  such 
contracts  were  legal  are  on  all-fours  with  the  contracts  which  it  is  pro- 
posed to  prohibit  and  make  criminal  by  this  bill.  One  was  for  a  divis- 
ion of  earnings ;  one  for  a  division  of  traffic  between  competing  roads 
running  between  two  great  points.  Xow  I  want  to  read  what,  when 
the  case  was  tried  at  law,  Judge  Campbell  said  to  the  Court  of  Queen's 
Bench : 

The  question,  then,  is  whether  the  agreement  is  void  in  law. 

That  agreement  was  this: 

Here  two  groups  of  railway  companies  being  respectively  the  owners  of  independent 
conterminous  routes  from  London  to  Edinbuig,  the  west  route  and  the  east  coast  route, 
agreed  to  divide  the  profits  of  the  whole  traffic  in  certain  fixed  proportions,  calculated  on 
the  experience  of  the  past  course  of  traffic. 

The}"  agreed  to  divide  the  whole  traffic. 
Lord  Campbell  says: 

The  question,  then,  is  whether  the  agreement  is  void  in  law.  As  it  has  been  clearly 
settled  that  an  agreement  to  withdraw  opposition  to  a  railway  bill  for  a  pecuniary  or  other 
consideration  is  not  illegal,  the  agreement  in  question  would  only  be  void  in  case  it  was 
illegal  upon  other  grounds,  such  as  those  suggested  on  the  part  of  the  defendants — that  it 
was  injurious  to,  and  therefore  in  a  legal  sense  a  fraud  upon,  the  public  or  the  sharehold- 
ers. The  defendant's  counsel  contended  that  it  was  injurious  to  the  public  by  giving,  in 
effect,  a  monopoly  to  the  plaintiffs,  and  thereby  depriving  the  public  of  the  benefit  that 
might  be  derived  from  competition. 

That  bugbear  of  free  competition  was  invoked  there  as  here. 

If  this  were  so,  and  the  parties 'proposed  by  their  agreement  to  endeavor  to  prevent 
competition  generally,  there  might  be  weight  in  the  objection  ;  but  the  effect  of  the  agree- 


INTER -STATE    COMMERCE  'LAW.  61 

ment  is  only  that  the  one  company  shall  not  compete  or  interfere  with  the  other  upon  the 
particular  line  mentioned  in  the  agreement;  this  is  no  more  illegal  than  it  would  be  for  two 
persons  engaged  in  trade  lhat  one  shall  not  ex2rcise  his  trade  nor  compete  with  the  other 
within  a  particular  district. 

I  shall  not  read  further,  but  I  will  say  that  it  having  been  settled  that 
such  contracts  are  valid  in  England,  are  held  to  be  not  injurious  to  the 
public,  not  against  public  policy,  this  law  writer  reviewing  the  whole 
question  of  decisions  in  America  comes  to  this  conclusion: 

It  is  believed  that,  except  when  prohibited  by  statute,  contracts  for  "pooling"  earn- 
ings by  rival  lines,  when  made  in  good  faith  for  self-protection,  and  which  do  not  result  in 
the  creation  of  a  monopoly  injurious  to  the  public,  are  valid  and  not  obnoxious  to  the 
charge  of  being  opposed  to  public  policy. 

Judge  Stevenson  Burke  (I  said  I  should  quote  but  few  railroad 
authorities,  and  I  quote  Judge  Burke  because  he  was  an  eminent  judge 
before  he  became  a  railroad  man)  says: 

In  England  parliament  has  established  a  railway  commission  and  sanctioned  bylaw 
contracts  of  the  character  and  kind  under  consideration,  but  before  parliament  acted  upon 
this  subject  the  English  courts  held  such  contracts  valid. 

And  he  closes  his  argument  for  the  legality  of  legal  "pooling  con- 
tracts in  these  words: 

Many  similar  quotations  mi^ht  be  made,  but  the  single  point  which  I  set  out  to  main- 
tain is  that  such  traffic  contracts  or  arrangements  honestly  and  fairly  made  in  the  interest 
of  the  public  and  of  the  shareholders  of  railway  companies,  are  not  only  not  void  as 
against  public  policy,  but  thev  are  in  all  respects  commendable,  promotive  of  public  and 
private  interest,  and  conducive  in  all  respects  to  the  public  welfare,  and,  therefore, 
of  necessity  lawful. 

Judge  Cooley  in  a  very  exhaustive  work,  from  which  I  have  already 
quoted  "  Popular  and  Legal  Views  of  Traffic  Pooling,"  goes  thoroughly 
into  the  question.     He  says: 

The  suggestion  of  poolin:,  though,  likely,  perhaps,  to  occur  anywhere,  comes  to  us 
from  England,  where  pooling  contracts  in  the  railroad  business  and  others  of  a  semi-public 
nature  have  been  held  not  to  be  illegal,  both  when  they  were  made  on  the  basis  of  an  equal 
division  of  profits  and  where  the  basis  was  a  division  of  business  between  the  contracting 
parties. 

Judge  Cooley  in  his  argument  clearly  maintains  that  such  contracts 
ought  not  to  be  held  illegal  in  this  country,  bat  he  says  it  is  impossible 
to  tell  what  the  courts  may  do  on  the  subject,  as  the  question  is  still  an 
open  question. 

I  should  not  be  treating  this  subject  fairly  if  I  did  not  admit  that 
there  were  two  cases  decided  in  the  State  of  New  York  in  1847,  which 
seem  to  be  conclusive  so  far  as  that  law  of  the  State  is  concerned,  and 
until  they  are  overruled  it  is  there  held  that  such  contracts  are  against 
public  policy  and  therefore  void.  Those  are  the  only  two  cases.  They 
have  not  escaped  criticism.  They  have  been  very  severely  handled  by 
other  courts,  and  it  is  more  than  probable  that  they  would  not  be  fol- 
lowed. 

I  will  read  what  Judge  Cooley  says  about  those  cases.  First,  let  me 
say,  however,  that  such  contracts  when  executed  have  always  been  held 
to  be  good  by  the  courts  of  the  United  States.  Judge  Nelson  in  the  cir- 
cuit court  in  Massachusetts,  and  Judge  Matthews  in  the  circuit  court  in 
Ohio,  have  explicitly  decided  that  when  once  executed  the  law  would 
compel  a  party  who  had  in  his  hands  any  money  which,  under  the  con- 
tract, should  be  paid  to  another  party  to  pay  it  over.     It  may  be  said 


62  INTER -STATE    COMMERCE    LAW. 

that  the  doctrine  of  estoppel  comes  in  there,  but  the  doctrine  of  the 
legality  of  contracts  was  raised  in  those  cases,  although  it  was  not  speci- 
fically passed  upon  by  the  judges  who  decided  them.  Contracts  for  the 
pooling  of  business  and  receipts  between  continuous  roads — 
roads  forming  a  continuous  line — have  been  repeatedly  held  to  be  good 
in  this  country. 

Now,  I  come  to  what  Judge  Cooley  sa}Ts  about  the  two  New  York 
cases,  referring  to  the  class  of  cases  to  which  I  have  just  been  alluding. 
He  says: 

Before  either  of  these  cases  was  decided  it  had  been  held  by  the  supreme  court  of 
New  York  (in  1847)  that  a  contract  between  the  proprietors  of  canal-boats  for  fixing 
rates  and  for  a  division  of  net  earnings  was  void,  though  the  object  was  expressed  to  be 
"  to  establish  and  maintain  fair  and  uniform  rates  of  freight  and  to  equalize  the  business 
of  forwarding  on  the  r  rie  and  Oswego  Canals  among  themselves,  and  to  avoid  all  unneces- 
sary expenses  in  doing  the  same."  The  argument  or  the  court  is  brief,  and  is  summed  up 
in  two  short  sentences:  "  The  object  of  this  combinition  was  obviously  to  destroy  compe- 
tition between  the  several  lines  in  the  business  engaged  in.  It  was  a  conspiracy,  between 
the  individuals  contracting  to  prevent  a  free  competition  among  themselves  in  the  business 
of  transporting  merchandise,  property  and  passengers  upon  the  pub  ic  canals."  "  It  is  a 
familiar  maxim  that  competition  is  the  life  of  trade.  It  follows  that  whatever  destroys  or 
even  relaxes  competition  to  trade  is  injurious  if  net  fatal  to  it." 

I  will  not  stop  to  read  the  decision  in  the  other  case  because  it  fol- 
lowed the  decision  already  referred  to.     Judge  Cooley  continues: 

These  cases  have  not  passed  entirely  without  criticism  in  this  country.  They  were 
cited  to  the  Supreme  Court  of  Wisconsin  not  long  after  they  were  made,  and  were  there 
dissented  from  in  very  vigorous  terms.  Referring  to  the  maxim  that  competition  is  the 
life  of  trade.  Judge  Howe,  speaking  for  the  court,  said  that  it  "  is  one  of  the  least  reliable 
of  the  host  that  may  be  picked  up  in  every  market  place.  It  is  in  fact  the  shibboleth  of 
mere  gambling  speculation,  and  is  hardly  entitled  to  take  rank  as  an  axiom  in  the  juris- 
prudence of  this  country.  I  believe  universal  observation  will  attest  that  for  the  last 
quarter  of  a  century  competition  in  the  trade  has  caused  more  individual  distress,  if  not 
more  public  injury,  than  the  want  of  competition.  Indeed,  by  reducting  prices  below  or 
raising  them  above  values— as  the  narure  of  the  trade  prompted — competition  has  done 
more  to  monopolize  trade  or  to  secure  exclusive  advantages  in  it, than  has  been  done  by  con- 
tract. Rivalry  in  trade  will  destroy  itself,  and  rival  tradesmen  seeking  to  remove  each 
other,  rarely  resort  to  contract,  unless  they  find  it  the  cheapest  mode  of  putting  an  end  to 
the  stri'e.  And  it  seems  to  me  not  a  little  remarkable  that  in  the  case  of  Stanton  vs. 
Alien- 
In  which  I  did  not  read  the  opinion  of  the  court- 
it  should  have  been  urged  against  the  agreement  that  its  object  was  to  exempt  the  stand- 
ard of  freights,  etc.,  from  the  wholesome  influence  of  rivalry  and  competition  For  it  is 
very  certain  that  because  of  that  very  purpose— because  they  did  tend  to  protect  the 
party  against  the  influence  of  rivalry  and  competition— courts  of  law  have  upheld  like 
agreements  in  partial  lestraint  of  trade  ever  since  the  case  of  Mitchell  vs.  Reynolds. 

Judge  Howe  was  afterwards  Senator  Howe,  and  I  need  not  say  to 
Senators  who  served  with  him  that  he  was  an  exceptionally  good  lawyer. 

Those  New  York  cases  decided  in  1847,  thus  criticised  and  dissented 
from  by  Judge  Howe,  may  have  been  cited  in  the  English  cases;  at  least 
they  were  decided  long  before  the  English  courts  held  precisely  the  op- 
posite doctrine.  Those  two  New  York  cases  are  the  only  ones  in  this 
country  on  which,  as  it  seems  to  me,  any  expectation  that  our  courts  will 
hold  such  contracts  illegal  can  be  based. 

Contracts  for  the  division  of  competitive  business  of  railroads,  or  of 
the  earnings  thereof,  are  not  agreements  to  enhance  or  depress  prices — 
are  not  agreements  to  control  production,  or  the  market  for  certain  pro- 
ducts— as  in  case  of  agreements  to  limit  the  output  of  coal  or  iron,  or 
the  supply  of  coal,  or  iron,  or  salt,  or  other  commodities.     Contracts  for 


INTER -STATE  COMMERCE    LAW.  63 

the  apportionment  of  traffic  between  competing  roads  are  easily  distin- 
guishable from  the  class  of  cases  to  which  I  have  just  referred. 

I  must  not  omit  a  dictum  of  Judge  Deady  in  the  circuit  court  in 
Oregon  upon  this  very  point,  for  although  a  dictum  it  is  significant. 
The  case  is  stated  and  his  opinion  quoted  in  full  in  the  report  of  the  Com- 
mittee on  Interstate  Commerce,  pages  121,  122. 

The  State  of  Oregon  passed  a  law  conforming  as  nearly  as  the  cir- 
cumstances of  the  case  would  admit — that  is,  as  State  jurisdiction  would 
admit — to  what  is  known  as  the  Regan  bill  in  Congress.  It  was  called  in 
Oregon  the  "Hoult  law."  A  receiver  who  was  to  manage  a  road  in  Ore- 
gon went  to  Judge  Deady,  of  the  circuit  court,  to  know  what  he  was  to 
do  in  view  of  that  law. 

The  Senators  from  Oregon  will  recollect  the  case  undoubtedly. 
Judge  Deady  was  the  judge  who  held  the  court  to  which  the  receiver  ap- 
plied. He  said  that,  as  regarded  this  matter  of  not  making  any  pooling 
arrangements,  he  did  not  think  that  the  law  was  applicable,  because  the 
roads  which  the  receiver  was  managing  were  not  "different  and  competing 
roads,"  the  language  being  the  same  which  is  used  in  this  conference  re- 
port bill,  but  that  one  was  a  supporting  road  to  the  other,  and  therefore 
he  did  not  think  that  the  receiver  need  trouble  himself  as  to  what  the 
construction  of  that  clause  of  the  statute  should  be,  but  he  said  more — 
he  went  out  of  the  way  to  say  it,  showing  what  Judge  Deady  would  de- 
cide when  such  a  contract  was  brought  before  him: 

Pooling  freights  or  dividing  earnings  is  resorted  toby  rival  and  competing  lines  of  rail- 
way a*  a  means  of  avoiding  the  cutiing  of  rates,  which,  if  persisted  in,  must  result  in  cor- 
porate suicide.  It  is  not  apparent  how  a  division  of  the  earnings  of  two  such  roads  can 
concern  or  affect  the  public  so  long  as  the  rate  of  transportation  on  them  is  reasonable. 

Sound  common  sense,  if  not  sound  law.  I  apprehend  that  it  will  be 
found  to  be  sound  law. 

But  I  want  to  refer  to  the  report  of  this  very  Committee  on  Interstate 
Commerce  on  the  subject  of  pooling.  It  is  not  very  long  since  this  re- 
port was  made.  What  did  the  Committee  on  Interstate  Commerce  think 
on  this  subject  as  to  whether  pooling  should  be  prohibited  under  crim- 
inal penalties?  When  they  reported~the  bill  originally  to  the  Senate,  on 
page  200  of  the  report,  they  said: 

In  view,  however,  of  the  active  competition  which  exists  at  the  great  commercial  cen- 
ters, the  successful  enforcement  of  legislation  requiring  the  operation  of  the  entire  trans- 
portation system  upon  a  basis  of  fixed  rates  would  seem  to  depend  upon  upon  a  general 
predetermination  of  the  rates  to  be  established  by  the  carriers  interested.  It  seems  nec- 
essary, therefore — 

"Necessary,"  the  committee  said  then — 

to  leave  a  way  open  by  which  such  agreements  can  be  made,  in  order  to  avoid  the  con- 
stant friction  that  would  otherwise  be  occasion  d. 

They  said  it  in  view  of  this  very  bill  and  of  its  provisions,  which  it 
is  now  claimed  may  do  away  perhaps  with  the  necessity  of  pooling. 

If  competition  is  to  have  full  sway,  as  it  does  now,  the  constant  changes  it  would  ne- 
cessitate would  render  it  impossible  to  maintain  fixed  rates,  just  as  it  is  now.  It  should  be 
understood,  therefore,  that  a  statute  requiring  the  posting  of  rates  and  prohibiting  changes 
without  notice  must  of  necessity  operate  in  restraint  of  competition  if  enforced. 

The  reasons  of  the  witnesses  who  wish  to  have  pooling  prohibited 
may  be  divided  in  this  way,  and  about  equally  divided: 
First,  pooling  prevents  competition. 


64  INTER  -  STATE    COMMERCE    LAW. 

Second,  it  encourages  the  building  of  new  railroads. 

Third,  it  produces  unjust  discrimination. 

The  latter  may  be  dismissed;  for  surely  we  can  not  strike  at  pools 
because  unjust  discriminations  have  been  the  result  of  not  observing  the 
pooling  contract.  What  we  propose  to  do  in  the  future,  if  investigation 
shall  develop  that  to  be  the  wisest  thing,  is  to  legalize  and  to  regulate 
pools.  That  will  compel  their  observance,  and  I  undertake  to  say  that  there 
was  never  discrimination  in  this  country  by  parties  to  a  pooling  contract 
when  the  contract  was  observed.  It  is  only  when  the  contract  is  broken 
that  the  discrimination  comes.  We  lay  aside,  then,  that  objection;  it  is 
not  a  valid  objection;  the  fact  is  that  the  non-observance  of  the  practice 
results  in  discrimination. 

Then  these  two  reasons,  one  that  they  prevent  competition,  and  one 
that  they  encourage  the  building  of  new  railroads,  do  not  agree  very 
well,  because  the  building  of  new  railroads  is  competition,  the  fiercest 
kind  of  competition,  the  worst  kind  of  competition,  competition  which 
the  Government,  if  it  had  the  power,  ought  to  put  its  hand  upon;  and 
everybody  who  will  think  a  moment  about  it  will  agree  with  me  in  this. 

Take  this  instance:  Here  are  two  railroads,  we  will  say — I  do  not 
know  whether  there  are,  if  not  there  soon  will  be — between  here  and 
New  York.  We  will  say,  for  illustration,  that  each  one  of  them  cost  $10,- 
000,000  to  build.  What  is  the  result?  There  is  so  much  business  be- 
tween Washington  and  New  York.  That  business  must  pay  if  the  rail- 
road is  to  be  fairly  remunerative — and  I  apprehend  it  is  for  the  welfare 
of  this  whole  country  that  railroads  should  be  fairly  remunerative — that 
business  must  pay  enough  to  pay  operating  expenses,  all  fixed  charges 
on  both  roads  and  reasonable  dividends  upon  the  stock  capital  of  each 
road.  Say  it  is  $20,000,000,  each  road  costing  $10,000,000,  and  all  rep- 
resented in  capital  stock,  so  that  after  the  operating  expenses  and  fixed 
charges  are  paid  it  takes  $800,000  to  pay  an  8  per  cent,  dividend  on  the 
stock  of  each.  Then  you  have  got  to  have  out  of  that  business,  net, 
$1,600,000. 

Now,  suppose  another  ten  million  dollar  road  is  built  between  here 
andNew  York,  what  then?  That  is  competition.  Competition  must  not 
be  restrained,  no  matter  in  what  form  it  comes.  What  is  the  result? 
There  is  another  ten  million  dollar  capital  on  which  $800,000  more  must 
be  paid,  in  dividends,  in  addition  to  paying  the  operating  expenses,  and 
fixed  charges  out  of  a  business  which  could  just  as  well  have  been  done 
by  the  two  roads.  There  is  no  more  ruinous  kind  of  competition  in  the 
world,  none  more  against  the  public  welfare  than  the  building  of  com- 
peting railroads  where  none  are  needed.  It  is  that  evil  which  has  led  to 
the  necessity  of  these  contracts  for  the  apportionment  of  competitive 
business. 

But  about  a  third  of  these,  fifty  men  out  of  the  two  hundred  who 
said  prohibit  pooling,  put  it  on  the  ground  that  it  was  against  public  pol- 
icy to  restrain  competition,  and  the  pooling  contracts  were  in  restraint  of 
competition,  and  therefore  they  were  against  public  policy  and  should  be 
declared  criminal. 

As  I  have  suggested,  there  is  a  class  of  people  in  this  country  who 
hold  that  any  competition  between  railroads  is  for  the  public  interest.  It 
comes  from  men  usually  who  want  this  whole  railroad  question  to  re- 


INTER- STATE    COMMERCE    LAW.  65 

volve  around  their  farm,  or  their  store,  their  uiiiie,  their  manufactory,  or 
their  bank.  There  are  men  who  would  be  glad  to  have  their  wheat  and 
their  cattle  and  their  coal  carried  for  nothing.  There  are  shippers  who 
would  rejoice  to  get  secret  rates,  or  pass-rates,  if  I  may  use  the  word,  for 
their  freight,  and  they  welcome  all  competition  which  puts  down  prices 
to  unremunerative  points.  Such  individuals  gain  by  such  competition, 
but  it  is  to  the  injury  of  every  other  citizen  of  the  United  States;  it  is  to 
the  demoralization  of  all  business;  it  is  the  breaking  down  of  all  business 
honesty  and  lawful  trade.  There  is  a  competition  which  is  worse  than 
the  combination  and  co-operation  of  railroads. 

I  said  I  assumed  in  discussing  these  pooling  contracts  that  the  rates 
were  always  reasonable,  and  I  challenge  proof  or  fact  to  show  that  a 
competitive  rate  in  this  country  is  unreasonable  unless  it  be  relatively  so. 
I  agree  that  there  are  some  cities  which  say  they  do  not  get  so  low  rates 
as  others  do  in  proportion,  but  that  would  be  a  matter  f or  a  commision  to 
fix.  However,  on  a  question  of  what  is  reasonable  in  any  man's  estima- 
tion, I  challenge  denial  when  I  say  that  the  competitive  rates,  the  rates 
for  competitive  business  in  this  country,  are  not  unreasonably  high.  In- 
deed, all  rates  have  gone  down  under  pooling  arrangements,  both  com- 
petitive rates  and  local  rates.  It  is  not  true,  as  the  petition  presented 
this  morning  stated,  that  pooling  makes  excessive  rates,  any  more  than  it 
is  true  that  it  makes  unjust  discrimination. 

There  is  a  world  of  figures  which  might  be  introduced  for  the  pur- 
pose of  proving  the  fact  that  under  pooling  arrangements  all  kinds  of 
freight  have  steadily  on  the  average  diminrshed  in  this  country.  I  re- 
member in  the  testimony  before  the  Interstate  Commerce  Committee  that 
question  came  up  as  to  the  Union  Pacific.  It  was  admitted  that  the 
through  rate,  the  competitive  rate,  was  as  low  perhaps  as  could  be  asked. 
It  was  shown  that  it  had  been  going  down  steadily  year  by  year,  until 
the  managers  of  the  road  said  they  did  not  know  what  they  were  going 
to  do.  But  it  was  urged  that  the  local  rate  had  not  been  reduced  as  the 
competitive  rate  had  been  reduced.  The  superintendent  of  that  road,  by 
figures,  showed  that  about  the  same  ratio  of  reduction  had  taken  place  in 
local  freight  as  in  competitive  freight. 

I  take  a  single  table,  which  I  propose  to  put  into  my  remarks,  and 
only  one,  and  to  get  it,  I  confess  that  I  called  upon  the  terrible  trunkline 
commission  in  New  York.  I  asked  them  to  answer  one  question,  and 
they  did.  I  say  that  because  it  is  headed  "Trunk  Line  Commission, 
New  York,  December  29,  1886." 


INTER -STATE    COMMERCE    LAW 


Trunk  Line  Commission,  New  York,  December  29,   i836. 
Statement  showing  the  average  earnings  per  ton  per  mile  by  the  following  roads  during 
the  years  1876  and  1885;  also  showing  decrease  in  earnings  per  ton  per  mile  dur- 
ing 1885  as  compared  with  1876. 


Road. 


New  York  Central  and  Hudson  River. 

New  York,  Lake  Erie  and  Western 

Pennsylvania - 

Pittsburg,  Fort  Wayne  and  Chicago.. 
Lake  Shore  and  Michigan  Southern.. 
Michigan  Central 


Average  six  roads o 


1876. 

1885. 

Decrease 
in  1885. 

Cents. 

Cents. 

Cents. 

1. 051 

0.680 

0-37* 

i.<99 

0.656 

o-443 

0.892 

0.627 

0.265 

c.930 

c.580 

0  350 

0.817 

o.553 

0.264. 

0.878 

0  560 

0.318 

0.625 


It  is  not  competitive  business  alone,  mind  you,  that  this  table  refers 
to.  It  is  all  the  business  of  these  roads,  competitive  and  non-competi- 
tive, through  and  local,  the  New  York  Central  and  Hudson  River,  the 
New  York,  Lake  Erie  and  Western,  the  Pennsylvania,  the  Pittsburg, 
Fort  Wayne  and  Chicago,  the  Lake  Shore  and  Michigan  Southern,  and 
the  Michigan  Central.  I  take  those  roads  because  they  are  roads  most 
directly  interested  in  the  movement  of  freight  between  New  York  and 
Chicago.  There  are  other  roads  in  what  is  called  the  trunk-line  com- 
mission, but  these  are  the  ones  which  I  think  fairly  illustrates  the  influ- 
ence of  pooling  management  upon  the  price  of  freight. 

From  this  table  it  will  be  seen  that  the  average  earnings  per  ton  per 
mile,  or  what  is  the  same,  the  average  charges  per  ton  per  mile  of  these 
roads  in  1876  was  9^  mills,  almost  1  cent  per  ton  per  mile  ;  while  in 
1885,  the  time  during  which  this  trunk-line  commission  has  been  in 
operation,  the  average  had  been  reduced  to  6£  mills  per  ton  per  mile 
upon  all  the  business  of  these  roads,  competitive,  non-competitive, 
through  and  local,  and  the  reduction  is  equal  to  33£  per  cent. 

Mr.  Plumb.  Can  the  Senator  supplement  that  statement  by  Baying 
how  evenly  that  reduced  rate  was  distributed  among  the  transporters  on 
the  various  lines  of  railroads? 

Mr.  Platt.  Of  course  I  can  not.  I  am  not  saying  that  there  are 
not  abuses  in  railway  management,  but  I  say  that  you  will  not  reach 
them  by  declaring  these  pooling  contracts  criminal.  I  say  pooling  con- 
tracts are  in  aid  of  remedying  the  abuses  of  which  you  complain,  and 
I  shall  show  it  bejore  I  get  through,  if  I  have  not  already  shown  it. 

I  might  turn  the  attention  of  Senators  to  the  statement  of  Mr. 
Edward  Atkinson  in  the  Century  for  the  present  month,  wdiere  he  gives  in 
a  table  the  charge  per  ton  per  mile  for  moving  merchandise  over  the 
New  York  Central  and  Hudson  River  Railroad  in  each  year  from  1855 
to  1885. 

In  1855  it  was  3£  cents  per  ton  per  mile  in  gold.  In  1885  it  was  6T8„ 
mills  per  ton  per  mile.  This  of  course  includes  non  competitive  as  well 
as  competitive  business. 

I  do  not  deny  that  discriminations  exist.  It  is  one  of  the  reasons 
why  this  bill  should  be  passed.  Discriminations  exist  in  spite  of  pools 
by  the  breaking  of  pooling  contracts,  not  by  the  observance  of  them. 


INTER -STATE    COMMERCE    LAW.  67 

Do  not,  in  the  name  of  common  sense,  declare  that  criminal  which  has 
for  its  end  the  purpose  which  you  avow  is  one  of  the  main  purposes  of 
the  bill. 

I  want  to  look  this  bugbear  of  so-called  free  competition,  which  it  is 
claimed  must  not  be  limited,  in  the  eyes  for  a  few  minutes.  I  have 
heard  the  maxim  that  ' '  competition  is  the  life  of  trade."  I  have  heard 
much  talk  of  the  so-called  law  of  nature  and  social  life  and  economic 
life,  "the  law  of  competition  and  the  survival  of  the  fittest."  In  the 
sense  in  which  they  are  invoked,  I  deny  and  repudiate  them  both. 
There  is  a  competition  which  is  not  lawful,  which  is  not  legal,  which  is 
not  honest. 

There  is  a  competition  which  degenerates  from  true  competition, 
and  becomes  simply  war  and  strife — war  carried  on  and  conducted  upon 
the  old  maxim  that  "  all  is  fair  in  love  and  war."  If  by  "  competition 
and  the  survival  of  the  fittest"  is  meant  competition  and  destruction 
of  the  weakest,  I  say  it  is  anti-Christian ;  it  is  anti-republican.  I  say 
that  that  kind  of  competition  which  results  in  the  destruction  of  the 
weakest,  the  survival  of  the  fittest,  if  permitted,  would  lapse  us  into  bar- 
barism. It  would  be  the  old  pagan  idea — the  old  despotic  idea — that 
might  makes  right ;  that  men  are  ruled  by  the  strong  hand,  and  not 
by  "regard  for  the  moral  law.  It  is  expressed  in  that  common  phrase, 
"the  devil  take  the  hindmost."  Talk  about  such  competition  being 
demanded  on  the  grounds  of  public  policy.  The  sooner  governments 
put  an  end  to  such  competition  the  sooner  humanity  will  be  free  to  ad- 
vance along  that  upward  pathway  by  which  it  is  to  reach  its  final  glori- 
ous elevation,  the  sooner  governments  will  come  to  that  beneficent  stand- 
ard designed  by  the  Creator  for  the  happiness  of  mankind. 

I  shall  show  pretty  soon  that  you  can  not  stop  competition.  Pooling 
arrangements  do  not  tend  to  stop  it.  Their  only  province  is  to  regulate 
it,  The  regulation  of  competition  is  not  only  not  against  public  policy, 
but  is  really  in  furtherance  of  the  public  welfare.  But  I  wish  to  verify 
what  I  have  been  saying  by  reference  to  the  opinions  of  some  other  men. 
As  I  said,  I  am  not  going  to  quote  railroad  men,  except  in  one  instance, 
on  this  subject.  I  want  to  quote  on  the  subject  of  what  competition  is, 
this  free  competition  which  it  is  said  must  not  be  prevented  by  pooling 
contracts — on  the  subject  of  what  it  is  and  what  it  accomplishes  I  wish 
to  quote  some  men  who  I  think  will  be  listened  to  in  the  Senate,  even  if 
I  am  not.  I  quote  from  the  report  of  Messrs.  Thurman,  Washburne  and 
Cooley,  constituting  an  advisory  commission  on  differential  rates  by  rail- 
roads between  the  west  and  the  seaboard.  I  think  nojnan  will  accuse 
Mr.  Thurman  of  being  a  subsidized  railroad  attorney,  or  Mr.  Washburne, 
or  Mr.  Cooley,  and  I  think  what  they  have  to  say  on  this  subject  of  com- 
petition will  have  some  weight. 

Mr.  Edmunds.     What  is  the  date  of  that  ? 

Mr.  Platt.     The  date  of  this  is  1882.     They  say: 

We  have  fcund,  however,  in  the  course  of  our  investigations,  that  a  species  of  compe- 
tition has  prevailed  from  time  to  time  which  has  brought  satisfaction  to  few  persons,  if 
any,  and  which  has  resulted  in  inequalities  and  disorders  greatly  detrimental  to  trade. 
Such  competition  exists  when  the  railroad  companies,  or  those  who  are  permitted  to  solicit 
business  and  to  make  contracts  on  their  behalf,  set  out  with  determination  to  withdraw 
freights  from  their  rivals  and  secure  them  for  themselves  at  all  hazards  and  regardless  cf 
gain  or  loss  ;  and  when  acting  upon  this  determination  they  throw  to  the  winds  all  settled 


68  INTER -STATE    COMMERCE    LAW. 

rates,  and  in  the  desperate  strife  for  business  offer  any  inducement  in  their  power  which 
will  secure  it.  The  country  not  long  since  had  experience  of  such  a  season,  and  every- 
where we  listened  to  complaints  of  the  injury  which  legitimate  business  suffered  from  it. 

Again — 

Under  such  circumstances  persons  were  favored  and  localities  were  favored,  when  the 
object  to  be  immediately  accomplished  seemedto  require  it— regardless  of  the  just  maxims  of 
legitimate  business,  and  of  the  rules  of  the  common  law,  which  enjoin  upon  common  car- 
riers that  they  shall  deal  with  all  customers  upon  principles  of  equity  and  relative  fairness. 
Legitimate  business,  it  was  said,  necessarily  passes  into  an  unsettled  and  speculative  state 
while  this  condition  of  things  exists;  safe  and  close  calculations  are  impossible  ;  transpor- 
tation becomes  cheap,  but  neither  producer  nor  consumer  is  certain  to  reap  the  profit,  for 
the  middlemen  can  not  calculate  upon  the  steadiness  in  low  rates,  and  as  he  takes  the  risk 
of  their  being  raised  upon  him,  so  he  is  in  the  best  position  to  appropriate  the  benefit  while 
they  continue.  Meantime  ,  xailroad  profits  disappear,  dividends  cease  to  be  paid,  to  ihe 
great  distress  of  thousands  who  rely  upon  them  for  their  living ;  and  every  interest  in  any 
degree  dependent  on  railroad  prosperity  must  participate  in  the  depression  and  disaster 
which  accompanies  the  ownership  of  railroad  shares. 

The  mere  statement  of  these  results  is  sufficient  to  show  that  this  is  not  what  in  other 
business  is  known  and  designated  as  competition.  Competition  is  the  life  of  trade,  but 
this  is  its  destruction  ;  competition  brings  health  and  vigor,  and  secures  equality  and  fair- 
ness, but  this  paralyzes  strength  and  makes  contracts  a  matter  of  secrecy  and  double  deal- 
ing. 

In  the  light  of  that  are  you  going  to  declare  as  criminal  these  con- 
tracts, these  arrangements,  which  nobody  will  deny  have  been  resorted 
to  by  the  railroads  simply  for  the  purpose  of  preventing  this  kind  of 
competition  described  by  Judge  Thurman  and  Washburne  and  Cooley  ? 

I  am  going  to  venture  to  quote  a  little  from  what  Mr.  Charles 
Francis  Adams  says  on  the  subject  of  competition.  He  is  a  railroad 
president.  Do  not  believe  him  if  you  do  not  want  to,  but  I  quote  him 
because  before  he  became  a  railroad  president  he  was  a  most  approved 
student  of  the  railroad  problem  from  a  scientific  standpoint.  Now,  in 
the  light  of  his  added  experience,  if  you  please,  he  said,  in  an  argument 
before  the  Committee  on  Commerce  of  the  United  States  House  of 
Representatives  on  the  bills  to  regulate  interstate  railroad  traffic. 

What,  then,  is  this  mysterious  underlying  cause  of  which  the  railroad  abuses  I  have 
referred  to  as  so  notorious  are  the  outward  manifestations  ?  With  all  possible  confidence  I 
assert  that  it  is  excessive  and  unregulated  railroad  competition  This  and  nothing  else. 
In  saying  what  I  am  about  to  say,  let  me  first  premise  that  I  have  no  intention  of  making 
myself  ridiculous  to  you  by  attempting  any  general  attack  on  the  great  laws  of  trade.  I 
fully  i-ecognize  their  efficiency  ;  and  as  respects  railroads,  I  concede  at  once  all  the 
wonderful  results  that  have  been  accomplished  thr  nigh  the  free  operation  in  this  country 
of  the  particular  law  of  competition.  But  all  that  has  nothing  to  do  with  the  present  ques- 
tion. Competition  is  a  great  thing,  but  it  works  in  rough  ways.  In  other  words,  every 
abuse  in  the  railroad  system,  so  far  as  the  interstate  commerce  of  this  country  is  con- 
cerned, can  be  shown  to  be  the  direct,  the  logical,  the  inevitable  outcome  of  unregulated 
and  desperete  competition,  and  a  mere  outward  skin  symptom  of  it. 

Oh,  yes,  prohibit  these  arrangements  by  which  the  railroads  seek  to 
prevent  this  illegitimate  competition,  declare  them  criminal, if  you  will, 
but  do  it  with  your  eyes  open. 

I  wish  to  take  Mr.  Nimmo's  report  and  see  what  he  says  about  it, 
Mr.  Nimmo  has  made  this  an  eight  years'  study.  If  anybody  wants  to 
get  full  information  on  the  history  and  effect  of  pooling  all  he  has  to  do 
is  to  read  Mr.  Nimmo's  reports.  He  will  find  an  almost  exhaustless 
store-house  of  facts.      Mr.  Nimmo  says: 

During  the  struggles  referred  to  success  waited  upon  intrigue  and  false  representations. 
The  freight  agents  deceived  the  merchants,  and  the  merchants  deceived  the  freight 
agents.       For    several   years  the    railroad     transportation  interests  of    the    country  ran 


INTER -STATE    COMMERCE    LAW.  69 

at  loose   ends.     The  contest   being  carried   on   independently  of  leadership  and  without 
method,  lost  the  name  of  competition  and  ended  in  demoralization. 

And  to-day  it  may  be  said  that  in  some  parts  of  this  countiy,  owing 
to  the  non-observance  of  apportionment  contracts,  just  that  condition 
of  things  exists  which  calls  most  loudly  for  the  interposition  of  legisla- 
tion. 

Going  on,  Mr.  Nimmo  says: 

It  appears  hardly  necessary  to  observe  that  such  a  contest,  involving  results  in  the 
highest  degree  detrimental  to  the  interests  of  productive  industry,  of  commerce,  and  of 
transportation,  had  in  it  none  cf  these  conservative  elements  of  legitimate  competition 
which  attach  to  ownership  and  to  personal  responsibility  for  results. 

Let  me  quote  a  gentleman  whom  I  regard  to  be  the  most  thoroughly 
informed  student  of  the  railroad  problem  in  the  United  States,  a  man 
who  is  beyond  the  suspicion  of  having  an  interest  in  railroads,  a  man 
who  is  so  close  to  the  industrial  interests  of  this  country  that  he  was  se- 
lected as  labor  commissioner  of  the  State  of  Connecticut.  I  refer  to 
Professor  Hadley,  of  Yale  College.  I  wish  to  read  a  little  of  what  he 
says  about  the  kind  of  competition.  I  read  from  the  May  number  of  The 
Popular  Science  Monthly,  from  an  article  entitled  "The  Difficulties  of 
Railroad  Regulation:  " 

While  railroad  competition  has  been  in  some  respects  a  beneficent  force  it  can  not  be 
trusted  to  act  unchecked.  To  the  business  community  regularity  and  publicity  of  rates 
are  more  important  than  mere  average  cheapness.  Business  can  adjust  itself  to  high  rates 
easier  than  to  fluctuating  ones.  And  railroad  competition  of  necessity  makes  rates  fluct- 
uate. It  tends  to  bring  them  down  to  the  level  of  operating  expense-;,  regardless  of  fixed 
charges.  If  it  acts  everywhere  as  in  the  case  of  the  New  \  ork  Central  and  West  Shore  it 
leaves  little  or  nothing  to  pay  fixed  charges,  and  means  ruin  to  the  investor,  followed  by 
consolidation.  If  it  acts  at  some  points  and  not  at  othtrs,  those  points  which  have  the 
benefit  of  competition  have  rates  based  on  operating  expenses,  while  the  less  fortunate 
points  pay  the  fixed  charges.     Then  we  have  discrimination  in  a  dangerous  form. 

As  long  as  competition  exists,  there  is  no  escape  from  this  alternative.  If  it  exists  at 
all  points,  it  means  ruin;  if  it  exists  at  some  points,  it  means  discrimination. 

I  read  from  Professor  Hadley's  book  on  Railroad  Transportation,  pub- 
lished in  1886,  a  book  which  I  commend  to  every  student  of  the  railroad 
question.  Referring  to  combinations  to  prevent  competition,  mainly  of 
combinations  among  laborers,  and  incidently  of  combinations  by  way  of 
pools  to  prevent  indiscriminate  and  illegal  railroad  competition,  he  says: 

While  the  experiments  in  State  socia:ism  have  been  so  often  bad,  there  has  been  a 
tendency  in  a  great  many  cases  to  go  too  far  to  the  opposite  extreme,  and  to  call  everything 
bad  which  restricted  competition  in  any  way. 

That  is  the  only  ground  upon  which  you  propose  to  make  these  pool- 
ing contracts  illegal: 

Courts  and  legislators  have  tried  to  stop  the  growth  of  industrial  monopoly  by  shut- 
ting their  eyes  to  industrial  facts.  They  have  tried  to  prohibit  such  combinations  al- 
together, the  courts  saying  that  they  would  not  enforce  contracts  in  restraint  of  trade,  the 
legislators  trying  to  render  it  illegal  to  make  such  contracts. 

They  could  not  stop  such  combinations  because  they  were  a  necessity  of  business. 
The  result  of  trying  to  prohibit  them  was  what  always  happens  when  you  try  to  prohibit 
a  necessity;  the  worse  features  of  the  system  were  intensified.  Secret  combination  was 
substituted  for  open;  short-sighted  and  arbitrary  policy  was  encouraged.  By  prohibiting 
the  whole  system  the  courts  deprived  themselves  of  the  power  of  dealing  with  specific 
evils,  such  as  secret  favors  or  arbitrary  discriminations. 

I  repeat  what  I  said  a  little  while  ago;  the  only  competition  which 
these  contracts  for  the  apportionment  of  competitive  business  seek  to 
prevent  is  the  competition  which  discriminates  between  individuals,  by 


70  INTER -STATE    COMMERCE    LAW, 

which  railroads  cheat  one  another,  and  by  which  they  violate  the  com- 
mon law  of  England  and  America. 

Competition  in  railroad  transportation  differs  from  every  other  kind 
of  competition  in  the  world.  I  do  not  say  that  it  is  not  to  be  judged  by 
the  same  legal  rule,  but  I  say  in  essence  and  in  character  it  is  different 
from  competition  in  any  other  business.  In  the  first  place,  it  is  not  com- 
petition in  trade.  The  railroad  buys  nothing  of  the  producer;  it  sells 
nothing  to  the  consumer.  It  simply  carries — it  distributes;  that  is  all. 
Contracts  in  restraint  of  trade  may  operate  the  same  wTith  reference  to 
contracts  between  common  carriers  as  between  merchants;  but  the  two 
kinds  of  business  differ  in  character.  It  differs  from  ever}'  other  busi- 
ness, because  whatever  the  result  of  the  competition  and  the  rivalry  the 
railroad  stays.  Ricardo  is  the  great  promulgator  of  the  doctrine  that 
competition  is  the  life  of  trade;  but  he  writes  fr  >m  a  banker's  standpoint. 
In  banking  capital  is  circulatory.  If  competition  drives  it  out  of  the 
banking  business  it  may  go  into  the  manufacturing  business.  But  the 
railroad  stays  whatever  the  result  of  the  competition.  If  '  'competition 
and  the  survival  of  the  fittest"  means  the  physical  removal  of  the  weak- 
est, the  pretended  law  is  inapplicable,  for  you  can  not  remove  the  rail- 
road. When  its  iron  rails  are  laid  down  from  point  to  point  there  it 
stays;  and  however  many  companies  may  be  bankrupted  by  competi- 
tion there  stands  another  company  ready  to  take  its  place  and  to  be 
bankrupted  in  turn.  It  is  not  soon  the  highways.  It  is  not  so  on  the 
water-ways.  If  two  rival  coach  proprietors  disagree  and  one  is  bank- 
rupted the  coaches  can  go  elsewhere  and  run  on  other  roads.  If  rival 
steamboat  lines  disagree,  and  by  competition  one  is  bankrupted,  the 
boats  can  go  elsewhere.  The  world  is  full  of  free  highways,  but  the  rail- 
road is  not  a  free  highway. 

[January  6,  1887. 

Resuming,  on  reassembling  of  the  Senate  January  6,  Mr.  Piatt  con- 
tinued: 

Mr.  President,  I  regret  that  I  consumed  as  much  time  as  I  did 
yesterday,  and  yet  perhaps  there  is  no  reason  why  I  should  apolo- 
gize in  view  of  the  fact  that  probably  never  in  the  history  of  govern- 
ments was  a  bill  under  consideration  which  would  inevitably  affect, 
either  directly  or  remotely,  so  great  financial  and  industrial  interests  as 
this  bill.  It  will  reach  every  hamlet,  every  industry,  every  laboring 
man,  and  every  laboring  man's  family  in  the  United  States  with  its 
results,  either  for  evil  or  for  good;  and  therefore  I  think  that  I  need  not 
apologize  for  the  time  which  I  have  already  taken  and  shall  take  in  dis- 
cussing it.     I  will  endeavor,  however,  this  morning  to  be  brief. 

I  endeavored  to  show  yesterday  that  contracts  which  are  called  pool- 
ing contracts  were  much  misunderstood.  I  undertook  to  show  that, 
though  abuses  ma}T  have  attended  the  administration  and  performance 
of  those  contracts,  there  was  nothing  inherently  wrong  in  them,  nothing 
inherently  injurious  to  the  public  welfare.  I  maintained  that  before  the 
Senate  and  House  of  Representatives  should  stamp  and  brand  them  as 
crimina.  somebody  should  show  that  they  were  inherently  wrong,  and 


INTER -STATE    COMMERCE    LAW.  71 

that  any  evils  or  mistakes  which  had  arisen  in  connection  with  their  exe- 
cution were  merely  incidental  and  not  a  necessary  result  of  the  system. 

I  undertook  to  show  that  they  were  recognized,  sanctioned,  and  en- 
forced by  the  decisions  of  English  courts,  and  that  it  was  at  least  an 
open  question  in  this  country  whether  they  would  not  be  sanctioned  by 
our  own  courts  upon  full  consideration.  I  undertook  to  show  that  they 
were  not  injurious  to  public  policy,  not  injurious  to  the  public  interests, 
by  combating  the  doctrine  that  every  kind  of  competition  in  trade  and 
business  is  for  the  public  welfare  and  the  public  interest.  I  tried  to  say 
— not  expressing  it  as  well  as  I  would  like  to  have  expressed  it — that  un- 
natural illegal  competition  is  always  opposed  to  the  public  interests,  and 
that  if  there  is  any  such  law  as  has  found  popular  expression  in  the 
phrase  "  competition  and  the  survival  of  the  fittest,"  it  is  a  law  which 
encourages  only  that  competition  which  results  in  the  best  and  the  perm- 
anence of  the  best.  I  claimed  that  these  contracts  in  their  nature  and  in 
their  proper  execution  were  not  opposed  to  the  competition  which  has 
for  its  object  the  encouragement  of  the  best  and  the  permanence  of  the 
best. 

When  I  gave  way  to  a  motion  to  proceed  to  executive  business  I 
was  speaking  upon  this  proposition,  that  the  business  of  the  railroad 
carrier  was  unlike  any  other  business  so  far  as  it  was  governed  and  in- 
fluenced by  the  law  of  competition.  I  had  shown  that  the  railroad  was 
not  a  free  highway,  not  a  highway  upon  which  all  the  citizens  of  the 
United  States  are  free  to  put  their  carriages  and  transport  goods  ;  that 
for  that  very  reason  the  law  of  competition  and  the  survivalship  of  the 
fittest  was  not  applicable  to  it,  for  that  involves  the  physical  removal  of 
the  weakest,  and  you  can  not  remove  the  railroad. 

You  may  bankrupt  the  management  of  the  road,  but  in  other  busi- 
ness when  you  bankrupt  the  management  the  capital  is  destroyed  and 
other  capital  goes  on  relieved  for  the  time  from  the  pressure  of  competi- 
tion ;  but  when  you  destroy  the  business  management  of  a  railroad  the 
capital  is  not  destroyed.  The  capital  is  mainly  invested  in  the  road. 
There  it  remains.  There  comes  to  take  the  place  of  the  bankrupt  cor- 
poration another  corporation  which  utilizes  the  capital  already  invested  ; 
and  the  result  is,  differing  from  results  in  any  other  kind  of  business 
(and  the  history  and  experience  of  railroad  management  in  this  country 
shows  it),  that  the  newcomer  inflates  the  capital,  and  after  bankruptcy 
there  is  more  capital  upon  which  dividends  must  be  paid  than  there  was 
before  competition  produced  the  bankruptcy;  that  railroad  capital  always 
grows  by  what  it  feeds  upon  It  is  probably  not  out  of  place  in  this 
discussion  to  speak  of  the  evil  which  results  from  the  inflation  of  rail- 
road capital. 

I  refer  only  to  the  acknowledged  fact  that  when  competition  has  de- 
stroyed one  competitive  railroad  corporation  another  takes  the  place  of 
the  vanquished  with  a  larger  capital,  to  be  in  turn  destroyed,  or  to  be  in 
turn  the  master  of  the  other  competitor. 

There  is  another  sense  in  which  interstate  commerce  is  not  like  any 
other  business  so  far  as  it  is  affected  by  the  law  of  competition.  The 
business  is  largely  of  a  public  nature.  v  As  I  said  yesterday,  it  is  the 
discharge  of  a  public  duty  which  the  railroad  engages  in,  certainly  in 
the  building  of  its  road,    'it  follows  as  a  matter  of  course  that  the  rail- 


72  INTER -STATE    COMMERCE    LAW. 

road  company,  in  so  far  as  it  is  discharging  that  part  of  its  duty  which 
is  public,  must  discharge  it  as  the  state  would  discharge  it ;  that  in  that 
respect  it  is  properly  limited  to  the  same  laws  of  competition,  the  same 
laws  of  business,  the  same  methods  of  regulation  and  of  doing  business 
to  which  the  state  would  in  justice  be  limited  and  to  which  it  would  in 
justice  be  subjected. 

The  railroad  company  assumes  in  this  business  a  portion  of  the 
power  and  duty  of  the  state.  Now  suppose  the  United  States  was  oper- 
ating the  railroads,  as  they  are  operated  in  Germany,  and  to  some  extent 
in  other  countries  of  Europe,  will  any  Senator  say  that  the  United  States 
should  enter  into  the  kind  of  competition  which  railroad  companies  are 
inevitably  forced  into  when  there  are  competing  roads  and  competing 
traffic  and  no  pooling?  Will  any  Senator  say  that  a  state  operating  rail- 
roads should,  under  any  circumstances,  allow  rates  to  be  put  down  to  a 
point  where  they  are  ruinously  low  or  practically  unremunerative? 

I  apprehend  that  the  Senator  who  should  claim  that  it  was  for  the 
public  welfare  and  the  public  advantage  that  a  state  operating  a  railroad 
should  carry  freight  for  less  than  cost  or  for  a  sum  which  barely  paid 
cost,  operating  expenses  and  fixed  charges,  would  be  told  that  while  cer- 
tain favored  citizens  who  wanted  to  ship  certain  commodities  over  the 
state  railroads  might  be  benefited  by  such  a  policy,  the  remainder  of  the 
public  was  taxed  for  the  benefit  of  the  few.  And  that  argument  holds 
just  as  good  when  private  corporations  are  managing  the  railroads  as  it 
would  if  they  were  managed  by  the  state. 

There  seems  to  be  a  great  misapprehension  in  some  portion  of  the 
public  mind  as  to  the  question  of  what  are  unreasonable  rates.  Some 
people  never  apply  that  term  except  when  the  rates  are  too  high.  They 
have  no  idea  that  the  rates  can  be  too  low.  I  maintain  that  a  rate  for 
carrying  freight  which  only  pays  operating  expenses  and  fixed  charges 
is  as  much  unreasonable  as  a  rate  which  is  too  high,  and  which 
will  pay  too  large  a  dividend  upon  railroad  property.  We  are  here  to  do 
justice  by  the  railroads  and  by  the  people.  We  are  to  hold  the  scales  of 
justice  with  even  hand,  and  not  act  from  prejudice  or  act  wantonly.  An 
unremunerative  rate  is  just  as  unreasonable  and  just  as  injurious,  though 
in  a  different  direction,  as  an  unreasonable  high  rate. 

The  railroads  of  this  country  must  see  to  it,  if  the  public  welfare  is 
to  be  promoted,  that  remunerative  returns  are  received  from  freights  and 
passengers.  I  do  not  stop  to  say  what  remunerative  rates  are.  I  do  not 
stop  to  speak  of  this  great  question  which  comes  up  when  that  is  to  be 
considered  as  to  whether  remunerative  rates  mean  such  rates  as  will  pay 
dividends  upon  the  inflated  capital  of  the  railroads  of  the  country.  That 
is  out  of  this  discussion.  I  mean  to  say  that  it  is  the  duty  of  railroads 
discharging  a  public  duty  as  well  as  a  private  duty  to  see  to  it  that  if 
possible  the  business  which  they  do  yields  remunerative  returns  to  the 
capital  investment,  and  that  you  can  not  endanger  the  public  prosperity 
or  destroy  the  public  welfare  any  quicker  than  to  establish  rates  or  to  let 
rates  be  established  by  competition  which  will  not  give  fair  remunera- 
tion to  the  capital  invested  in  railroad  enterprises.  The  whole  history  of 
the  country  shows  it,  I  have  seen  two  railroad-rate  wars  which  resulted 
in  such  demoralization  of  business  in  this  country  as  to  produce  what 
might  have  been  called  two  years'  continuous  panic. 


INTER -STATE    COMMERCE    LAW.  73 

Uuremunerative  rates  injure  first  the  investors  in  railroad  securities, 
next  railroad  employees, next  co-related  industries, and  lastly  all  industries; 
and  it  is  the  last  wave  of  the  enlarging  circle  of  disturbance  that  is  most 
disastrously  felt.  The  injury  produced  by  unreasonably  low  rates  is 
finally  felt  by  every  citizen.  The  toiler  in  remote  hamlets  feels  the 
baneful  effects  of  the  general  depression,  but  usually  ascribes  the  result 
to  every  cause  but  the  primary  one,  which  is  the  railroad-rate  war  and 
the  unreasonably  low  rates  produced  thereby.  The  interests  of  the 
people  are  so  closely  united  that  an  injury  to  one  branch  of  business  is 
felt  by  all.  Here  truly  an  injury  to  one  is  the  concern  of  all.  How 
appropriate  in  this  connection  the  language  of  inspiration:  "We  are 
man}r  members,  3ret  but  one  body  ;  and  the  eye  can  not  say  unto  the 
hand,  I  have  no  need  of  thee  ;  or  again  the  head  to  the  feet,  I  have  no 
need  of  thee." 

I  think  people  misapprehend  the  question  in  this  respect.  It  is 
within  the  power  of  one  railroad  president  to  practically  depress  the 
entire  business  of  the  nation  ;  and  the  West  Shore  Railroad  and  its 
management  is  a  recent  example  and  illustration  of  what  I  say.  For  this 
reason  railroads  are  not  subject  to  the  same  law  of  competition  as  other 
kinds  of  business  are. 

There  is  another  reason,  which  is  seldom  alluded  to.  The  competi- 
tion, mark  you,  which  it  is  claimed  must  not  be  prevented  is  the  compe- 
tition between  competing  railroads  for  competitive  business.  The  pro- 
position is  no  matter  what  that  competition  is,  no  matter  what  the  result 
of  is  as  to  the  lowering  of  rates  or  the  discriminations  which  ensue,  it 
must  not  be  prevented,  and  therefore  pooling  must  be  prohibited.  It 
is  to  that  proposition  that  I  desire  to  hold  the  discussion  of  this  questio^i. 

The  reason  which  I  last  alluded  to  is  this:  When  rates  are  forced 
below  the  remunerative  point,  how  does  the  railroad  manager  and  the 
railroad  president  attempt  to  make  money?  Not  from  the  legitimate 
business  of  the  railroad,  but  by  stock  gambling.  Uuremunerative  rates 
inevitably  substitute  stock  gambling  for  the  legitimate  profit  of  business, 
substitute  the  effort  to  get  money  by  stock  gambling  for  the  effort 
to  earn  it  legitimately  by  railroad  business.  It  is  inevitable  ;  it  is  in  the 
nature  of  things. 

It  is  not  the  remunerative  railroad  that  furnishes  the  business  for 
the  stock  exchange.  It  is  not  dealing  in  the  remunerative  railroad  secur- 
ities that  produces  panic,  that  makes  millionaires  and  makes  paupers  in 
this  country.  The  inducement  to  this  business  comes  from  the  fact  that 
by  strife  for  competing  business  railroad  managers  are  unable  to  make 
profit  in  a  legitimate  way.  And  so  I  say  that  the  law  of  competition 
claimed,  though  it  may  be  just  as  to  other  business,  is  inapplicable  to 
the  business  of  the  management  of  railroads. 

But,  Mr.  President,  contracts  such  as  I  have  described,  arrange- 
ments such  as  this  bill  proposes  to  prohibit,  can  not  essentially  interfere 
with  or  prevent  competition  between  railroads.  That  kind  of  competi- 
tion, which  it  is  supposed  is  prevented  by  such  contracts,  is  the  mere 
speck  which  floats  upon  the  mighty  current  of  competition,  always  flow- 
ing. There  are  a  thousand  forces  which  compete  in  rivalry  for  the 
reduction  of  the  rates  of  transportation,  and  you  can  no  more  stop 
those  forces,  no  more  stop  the  competition  that  goes  on  by  the  clash  of 


U  INTER- STATE    COMMERCE    LAW. 

rival  commercial  interests  in  this  country  and  the  world,  than  you  can 
sweep  back  the  ocean  with  a  broom. 

The  Mississippi  River,  the  Welland  Canal,  great  cities  at  different 
parts  of  the  country  forming  commercial  centers  with  different  interests 
to  be  subserved,  the  ocean,  the  Canadian  lines,  the  transit  of  the  isth- 
mus, the  ever  clashing  interests  of  diversified  business — all  these  are 
potent  factors  continually  by  their  rivalry  competing  for  the  reduction 
of  railroad  freights.  Cotton  in  the  South,  and  in  Egypt ;  wheat  in 
Dakota  and  in  India  ;  petroleum  in  the  United  States  and  in  Russia  ;  coal 
in  Pennsylvania  ;  iron  in  Spain,  all  these  things,  and  a  thousand  others, 
form  an  anti-monopoly  league  stronger  than  individuals  or  boards  of 
trade,  or  commercial  exchanges  can  form.  They  make  it  impossible  that 
this  purely  competitive  business  can  be  done  at  excessive  rates  charged 
by  common  carriers.  These  contracts  for  division  of  business  or  appor- 
tionment of  freight  are  but  a  trifle  among  the  great  forces  which  carry 
on  the  great  war  of  competition  which  has  so  materially  reduced  the 
charges  for  the  transportation  of  freight,  and  which  will  go  on  until  the 
lowest  limit  possible  with  remunerative  returns  is  reached. 

If  I  had  time  I  should  like  to  stop  here  for  a  moment  to  speak  of 
my  belief  that  the  limit  has  not  yet  been  reached.  The  capacity  of 
freight-cars  has  been  increased  from  18  tons  to  20  tons;  Bessemer  steel 
rails  have  taken  the  place  of  iron  rails;  improvements  in  machinery,  in 
locomotives — all  these  things  have  marvelously  reduced  the  cost  of  trans- 
portation. Sometimes  we  feel  that  the  end  is  reached,  but  I  am  told  that 
freight-cars  are  now  in  process  of  construction  which  will  carry  25  tons 
or  50,000  pounds,  in  place  of  the  original  cars  with  a  capacity  of  20,000 
pounds;  that  engines  are  being  built  whose  ten  driving  wheel  will  wonder- 
fully increase  the  power  of  locomotion,  and  that  these  improvements  in  en- 
gines and  cars  will  necessitate  the  relaying  of  the  iron  rail,  substituting  a 
heavier  rail,  perhaps  a  100-pound  rail  for  60-pound  rails.  The  limit  of 
the  cheapening  of  the  cost  of  transportation  has  not  begun  to  be  reached, 
and  these  little  arrangements  between  railroad  companies,  adopted  for 
their  self-protection  and  for  the  protection  of  the  public  as  well,  have 
very  little  part  to  play  in  this  great  competition  which  is  going  on  and 
must  go  on  relation  to  this  business. 

But  there  is  another  ground  on  which  I  ask  the  Senate  to  pause  be- 
fore it  declare  such  arrangements  between  railroad  companies  to  be  crim- 
inal. I  want  them  to  consider  a  question  which  take  hold  of  the  future 
of  this  country.  These  contracts  and  agreements  and  arrangements  be- 
tween railroad  companies  are  in  the  nature  of  business  combinations  be- 
tween different  railroad  corporations.  Admit,  if  you  please,  that  there 
is  something  bad  about  them,  for  the  sake  of  argument;  they  must  be 
tolerated,  or  the  alternative  is  consolidation  of  railroad  capital.  I  dread 
that  result.  Some  political  economists,  some  railroad  men,  and  some 
men  interested  in  what  they  think  they  see  in  the  future,  the  grand  co- 
operative commonwealth,  believe  that  that  is  the  best  outcome  of  the 
railroad  problem. 

I  wish  to  emphasize  this  point;  George  Stephensen  said  that  where 
combination  was  possible  competition  was  impossible;  and  no  man  ever 
said  a  truer  thing.  This  bill  leaves  open  and  invites  the  worst  kind  of 
combination  which  this  country  may  fear;  that  is,  the  combination  and 
consolidation  of  railroad  corporate  capital. 


INTER -STATE    COMMERCE    LAW.  75 

What  are  the  railroads  to  do  if  forbidden  to  make  these  arrange- 
ments? Experience  teaches  that  the  old  rate  war  will  begin;  the  bill  en- 
courages it.  It  requires  no  notice  from  a  railroad  company  to  put  down 
its  rates;  but  notice  in  order  to  advance  its  rates.  The  whole  bill  is  an 
invitation  to  the  individual  railroad  company  to  put  down  its  rates  with- 
out public  notice,  and  that  means  private  notice  in  advance  for  the  pur- 
pose of  securing  business.  The  war  is  to  go  on  if  it  is  not  restrained  by 
those  arrangements  which  the  railroad  companies  believe  best  for  them- 
selves in  the  interest  of  protection,  and  the  result  will  be,  as  it  always  is, 
consolidation,  capitalistic  consolidation. 

Why,  Mr.  President,  the  monopolies  of  this  country  are  built  on  the 
graves  of  weak  competitors,  and  this  bill  invites  that  grand  monopoly  of 
railroad  capital  in  this  country  which  will  be  built  upon  the  graves  of 
railroads  that  are  not  able  to  stand  in  the  competition,  and  which  railroad 
monopoly  will  be  the  master  of  the  people.  I  have  not  learned  that  such 
results  are  to  be  regarded  with  favor.  I  can  not  unlearn  all  the  teach- 
ings of  my  youth  at  the  demand  of  these  economists,  these  professors  of 
political  economy,  these  railroad  men,  and  these  socialists.  I  believe  that 
it  is  better  to  keep  business  in  a  good  many  hands,  if  you  can,  than  to 
concentrate  it  in  a  few  hands.  I  believe  it  is  better  to  let  the  little  stores 
in  the  country  live  than  to  build  up  the  great  mercantile  establishments 
at  their  expense.  I  believe  it  is  better  to  let  the  little  factories  live  than 
to  build  up  the  great  manufacturing  corporations  at  their  expense.  I  be- 
lieve it  is  better  to  let  the  weak  railroads  live  in  this  country  than  it  is  to 
build  up  one  gigantic  railroad  corporation  which  shall  occupy  to  the  rail- 
road business  of  the  country  the  same  position  which  the  Western  Union 
Telegraph  Company  occupies  to  the  telegraph  business  of  the  country. 

I  believe  we  are  holding  up  a  false  standard  to  our  young  men,  that 
the  "little  farm  well  tilled"  is  better  than  many  leagues  of  land  in  one 
ownership  tilled  by  capitalists  whose  laborers  come  and  go,  and  who 
have  little  sympathy  with  the  proprietors;  that  a  "little  house  well  filled'' 
is  better  than  the  marble  palace  with  its  interior  decorations  of  gold,  its 
hangings  of  silk,  and  artistic  carpets  from  the  marts  of  foreign  nations, 
better  in  their  tendency  to  the  advancement  of  the  prosperity  of  the 
nation  and  the  welfare  of  its  people.  But  this  bill  presents  these  alterna- 
tives. Senators  may  feel  perhaps  that  I  am  overstating  this  niattei .  I 
want  to  turn  them  for  a  moment  to  history. 

The  railroads  of  this  countiy  have  not  had  a  long  life.  What  Las 
been  the  history  with  regard  to  consolidation — I  mean  a  consolidation  of 
capital,  not  combination  by  these  business  arrangements,  which  I  defy 
any  man  to  say  are  inherently  wrong?  I  turn  to  Mr.  Hadley's  book,  and 
I  find  that  since  1853  the  New  York  Central  Railroad  Company,  then 
composed  of  fifteen  or  sixteen  separate  organizations,  has  consolidated 
and  consolidated,  until  now  it  has  a  system  including  more  than  4,000 
miles  of  railroad  line. 

I  find  that  the  Pennsylvania  Railroad  Company,  originalby  com- 
posed of  local  roads,  has  under  one  system  and  one  management  7,000 
miles  of  railroad  track.  I  find  that  what  is  called  the  Wabash  system, 
originally  composed  of  many  small  railroads,  is  now  welded  into  one  gi- 
gantic management  of  9,500  miles.  Where  is  this  to  stop?  It  is  the 
dream  and  vision  of  the  railroad  man  that  it  shall  go  on.     That  is  the 


76  ENTER -ST  ATE.  COMMERCE    LAW. 

outcome  of  the  problem  for  him.     It  is  only  a  temporary  check  that  he 
supposes  is  put  upon  it  by  these  pooling  arrangements. 

Let  me  turn  for  a  moment  to  the  testimon}-  of  one  railroad  man  on 
this  subject.  I  read  from  Charles  Francis  Adams'  testimony  before  the 
Interstate  Commerce  Committee  on  the  subject  of  pooling,  page  1204  of 
the  report : 

So  far  as  pooling  is  concerned— a  subject  I  see  a  good  deal  discussed— pooling,  as  I  re- 
gard it,  is  a  mere  makeshift.  It  is  an  attempt  on  the  part  of  the  railroads  to  hold  in  check 
a  natural  law  which  would  result  in  the  survivalship  of  the  fittest.  If  competition  worked 
with  its  full  severity  and  legislation  put  a  stop  to  all  pooling,  saying  absolutely  to  the  rail- 
roads. "There  you  are,  and  you  have  got  to  compete" — and  this  I  take  to  be  the  object  of 
the  proposed  law  I  do  not  suppose  there  would  be  at  the  end  of  two  years  more  than  three 
or  four  leading  corporations  in  the  country  that  would  not  be  in  the  hands  of  receivers.  It 
would  be  the  condition  of  affairs  now  temporarily  existing  in  New  York  between  the  Cen- 
tral and  West  Shore  roads,  peipetuated  and  made  chronic  by  force  of  law.  Everlasting 
warfare  among  railroads  would  be  provided  for  by  statute.  The  thing  is  absurd  and  un- 
worthy of  discussion.  Of  course  the  railroads  would  in  some  way  agree  to  divide  traffic, 
and  to  divide  traffic  is  to  pool  it.  But  supposing  the  pooling  or  division  of  the  traffic  ef- 
fectually forbidden  by  law;  then,  so  far  as  I  can  judge,  the  natural  result  would  follow,  a 
result  which  I  for  one  do  not  object  to  at  all,  though  it  would  be  attended  with  immense 
waste  of  wealth  and  would  wipe  out  of  existence  forms  of  securities  which  in  amount  prob- 
ably would  far  exceed  the  national  debt  of  the  country. 

The  result  would  be  that,  as  the  companies  became  bankrupt,  those  who  got  possession 
of  their  properties  would  combine  and  consolidate  them,  and  you  would  have  one  railroad 
corporation  in  the  country  in  the  couiseof  afew  years  which,  as  compared  with  the  cor- 
porations you  now  have,  would  occupy  about  the  position  the  Western  Union  Telegraph 
Company  occupies  among  telegraph  companies;  that  is,  one  wholly  predominating  com- 
pany. In  other  words,  the  legislation  intended  to  prevent  the  pooling  of  traffic  and  insure 
competition  would  produce  exactly  what  it  was  meant  to  prohibit.  The  railroads  would 
be  pooled  themselves,  and  competition  would  be  done  away  with  through  consolidation. 

Then  he  goes  on  to  say: 

In  order  to  secure  so  far  as  may  be  what  you  desire — that  is,  to  preserve  competition 
aud  prevent  this  consolidation  into  great  corporations — the  course  that  Congress  should 
pursue  would  be  the  exact  opposite  of  what  is  now  suggested.  Congress  should  legalize 
pooling,  and  impose  a  heavy  penalty  on  any  violation  of  pooling  agreements.  That  would 
keep  the  weaker  corporations  alive  and  prevent  them  being  absorbed  by  the  large  ones,  as 
they  inevitably  soon  must  be  the  way  things  are  now  going  on. 

It  will  be  observed  that  this  bill  does  not  in  any*  line  of  it  prohibit 
the  consolidation  of  railroad  capital,  and  in  my  judgment  by  prohibiting 
pooling  and  making  it  criminal  it  invites  that  result. 

Now,  I  desire,  Mr.  President,  to  answer  in  advance,  if  I  can,  an 
argument  which  I  know  Mill  surely  be  made  in  reply  to  what  I  say.  It 
is  that  when  the  bill  prohibits  discrimination  the  necessity  of  pooling- 
will  be  done  away  with.  Suppose  that  to  be  so,  for  a  moment.  It  is 
rather  hard,  even  in  that  case,  to  say  that  a  practice  which  has  been  re- 
sorted to  with  the  avowed  purpose,  and  only  for  the  purpose,  whatever 
its  results  ma}'  have  been,  of  preventing  discrimination,  shall  be  declared 
criminal  because  the  bill  declares  that  discrimination  must  cease.  I  main- 
tain that  that  is  illogical. 

But  I  do  not  believe  that  this  bill  unaided  and  alone  will  do  away 
with  discrimination,  and  I  say  so  because  it  is  the  experience  of  foreign 
countries  that  rigid  laws  aimed  against  discrimination  have  been  ineffectual 
except  as  aided  by  the  efforts  of  the  railroads  themselves  by  pooling. 
The  experience  of  foreign  countries  is  worth  something,  and  I  want  here 
to  state  what  is  said  on  the  subject  by  Mr.  Hadley.  I  do  not  know  but 
that  I  read  it  yesterday,  but  I  wish  to  emphasize  what  he  says  in  these 
few  words: 


INTER -STATE    COMMERCE    LAW.  77 

We  are  thus  reduced  to  the  simple  alternative,  pooling  or  discrinvnation.  Each  effort 
to  prohibit  both  at  the  same  time  only  makes  the  necessity  more  clear.  The  governments 
of  continental  Europe  have  ceased  to  struggle  against  it.  Rightly  judging  that  discrimi- 
nation is  the  main  evil,  they  recognize  pools  as  the  most  effective  method  of  combating  it. 

And  yet  for  years  and  years  they  have  had  these  anti-discrimination 
statutes  which  they  can  not  enforce,  and  it  was  only  by  a  resort  to  a  sys- 
tem of  pooling  that  they  were  able  to  enforce  their  laws.  Is  it  not  a 
strange  thing,  a  solecism,  that  it  should  be  urged  here  that  an  effort 
among  railroad  companies  to  secure  the  same  thing  which  you  say  is  to 
be  accomplished  by  this  bill  should  be  declared  criminal?  Is  it  wise  to 
discard  any  aid  or  agency  which  may  help  to  carry  out  and  make  effec- 
tive in  its  operation  so  important  a  bill  as  this  and  the  removal  of  which 
may  throw  discredit  upon  the  whole  legislation  and  render  it  absolutely 
ineffectual  ? 

I  wish  to  read  what  the  real  situation  with  regard  to  pooling  is  in 
foreign  countries. 

Believing  Professor  Hadley,  to  whom  I  have  so  frequently  referred 
in  this  discussion,  to  be  the  most  thoroughly  informed  and  thoroughly  in- 
dependent student  of  the  railroad  problem  in  the  country,  I  wrote  him 
asking  for  information  as  to  the  present  status  of  pooling  arrangements 
in  Europe. 

New  Haven,  December  25,  1886. 

My  Dear  Mr.  Platt:  The  most  conspicuous  examples  of  the  public  use  of  pooling 
are  found  in  Belgium,  Germany,  and  Austria.  Fifteen  years  ago  all  these  countries  had 
a  good  deal  of  active  railroad  competition;  and  it  was  found  in  each  country  that  under 
any  such  active  competition  it  was  impossible  to  secuie  obedience  to  any  law  against  dis- 
crimination. The  reckless  and  speculatively  managed  roads  were  able  to  force  not  merely 
the  sounder  private  roads  but  the  state  roads  themselves  into  discriminations  of  the  worst 
kind. 

You  know  the  general  history,  and  I  will  only  mention  one  or  two  recent  facts: 

I.  The  Belgian  state  railroads  have  within  the  last  two  years  concluded  a  pooling 
agreement  with  the  only  private  system  of  importance,  which  provides  for  an  almost  per- 
manent division  of  traffic  and  is  intended  to  render  competition  forever  impossible. 

II.  Although  nearly  all  the  railroads  in  Germany  are  state-owned,  the  rivalry 
between  different  systems  is  so  strong  that  the  pool  is  necessary  to  regulate  the  action  of 
the  officials  themselves;  and  in  order  that  the  system  may  be  thoroughly  carried  out, 
a  recent  imperial  ordinance  forbids  the  shipper  to  select  the  route  over  -which  his  goods 
are  to  be  sent. 

III.  In  Austria  not  merely  do  the  state  roads  divide  traffic  with  the  private  roads, 
but  also  with  competing  water  routes;  and  the  government  authorities  say  explicitly  that 
they  regard  this  as  the  only  possible  method  of  securing  justice  to  local  points.  There 
has  been  no  recent  change  in  legislation,  but  the  practice  is  becoming  more  fully 
established  every  day. 

These  are  the  countries  where  the  most  positive  authority  is  given  to  poo!s  ;  they  are 
also  those  where  railroads  are  the  best  managed,  rates  on  the  whole  lowest,  ard  traffic 
developing  most  harmoniously.  The  other  countries  may  be  divided  into  two  classes.  In 
one  class  are  France  and  Italy,  where  the  country  is  districted  between  different  railroads, 
and  competition  thus  rendered  impossible — a  division  of  the  field  instead  of  a  division  of 
the  traffic.  Yet  these  countries  pool  their  international  traffic,  which  can  not  be  thus  dis- 
tricted. 

The  second  class  includes  those  countries  where  pooling  is  merely  tolerated  rather 
than  encouraged — Switzerland,  Russia,  Holland,  or  England.  It  is  noticeable,  1,  that 
these  countries  suffer  from  more  abuses  and  discrimination  than  those  previously  men- 
tioned ;  2,  that  they  are  worse  where  natural  cau-es  have  hindered  the  growth  of  pools, as 
shown  by  a  recent  investigation  in  Holland  ;  3,  that  government  authority  over  rates, 
however  great,  is  ineffective  to  prevent  discrimination,  Russia  being  a  strong  instance  in 
point. 

As  far  as  I  know,  no  European  country  directly  prohibits  pools. 
Sincerely  yours, 

ARTHUR  T.  HADLEY. 


78  INTER-STATE    COMMERCE    LAW. 

I  do  not  think  that  we  can  afford  to  overlook  the  importance  of  the 
experience  of  these  countries  in  this  respect. 

There  is  a  single  other  feature  of  this  bill  to  which  I  wish  to  refer  in 
this  connection.  It  contains  a  short-haul  clause  or  law.  Why  ?  Why 
the  necessity  for  it  ?  The  inexorable  logic  of  the  case  is  that  the  com- 
petitive rate  is  too  low  and  the  railroads  are  attempting  to  earn  remu- 
nerative rates  by  putting  unreasonable  charges  upon  local  traffic.  Is 
there  any  other  reason  for  a  short-haul  law?  What  is  to  be  the  effect 
of  the  prohibition  of  pooling?  To  make  the  competing  rates  still  lower  ; 
they  being  now  too  low,  and  to  force  the  railroad  company  if  it  be  pos- 
sible to  raise  its  local  rates. 

How  a  man  who  insists  upon  the  necessity  and  justice  of  a  short- 
haul  law  can  also  insist  upon  the  necessity  and  justice  of  a  prohibition  of 
pooling,  I  am  unable  to  see.  You  propose  to  remedy  the  already  too 
low  competitive  rates  by  saying  that  the  railroads  shall  not  recoup  for 
their  losses  upon  the  local  traffic,  and  yet  you  propose  to  prohibit  that 
very  thing  which  the  railroad  companies  have  adopted  as  the  only  means 
known  to  them  to  prevent  competitive  rates  from  going  still  lower.  You 
put  the  railroad  companies  in  the  condition  of  a  man  under  what  was 
claimed  to  be  the  old  Calvinistic  theology,  of  which  it  was  wittily  rather 
than  truly  said  that  under  its  doctrine  a  man  is  "  damned  if  he  does,  and 
damned  if  he  don't."  That  is  precisely  what  this  bill  proposes  to  do 
with  the  railroad  companies  of  the  country.  In  my  judgment  a  more 
glaring  inconsistency  in  legislation  was  never  attempted  than  in  this 
proposal  to  insert  a  short-haul  law  and  the  prohibition  of  pooling  in  the 
same  bill. 

But  there  is  another  point  to  which  I  did  not  allude  at  length  when 
I  was  speaking  of  the  competition  which  exists,  that  it  seems  to  me 
makes  pooling  necessary  and  makes  its  prevention  entirely  improper. 
The  American  railroads  which  are  competing  between  the  West  and  the 
East  under  this  bill  with  pooling  prohibited  will  be  absolutely  at  the 
mercy  of  the  Grand  Trunk  Railroad  of  Canada.  Whatever  effect  a 
short-haul  and  long-haul  clause  may  have  upon  that  traffic  as  diverting- 
it  to  Canada,  you  may  rest  certain,  I  think — and  I  think  experience 
justified  me  in  the  assertion — that  if  pooling  is  prohibited  the  traffic  of 
the  West  comes  to  the  seaboard  through  Canada  and  not  over  American 
roads.  Why  ?  Because  by  this  bill  you  invite  the  Grand  Trunk  road 
to  put  down  its  rates  without  notice.  It  desires  first  of  all  things  to 
insure  business.     Then  it  can  put  them  up  probably. 

It  is  to-day  making  its  arrangements,  by  the  outlay  of  great  amounts 
of  money  in  securing  unproved  cars  and  engines  and  the  improvement 
of  its  track  to  do  a  greater  through  business.  Xow,  prohibit  pooling, 
put  the  bill  in  operation,  and  what  will  be  the  result  ?  The  Grand  Trunk 
road  may  put  all  through  business  from  the  West  to  the  seaboard  down 
to  an  unremunerative  point  and  make  up  for  it  recouping  upon  the 
local  traffic  through  Canada,  and  we  are  powerless  to  prevent  it.  You 
may  say  that  pooling  would  not  prevent  it  ;  but  it  is  the  only  means 
which  the  American  roads  have  to  secure  any  terms  with  the  Grand 
Trunk  road  which  shall  give  them  any  considerable  share  of  the  traffic 
which  shall  pass  from  the  West  to  the  seaboard. 

I  have  already  occupied  more   time  than  I  desired,  and,   instead  of 


INTER -STATE    COMMERCE    LAW.  79 

stating  my  own  conclusion  as  to  what  pooling  has  accomplished,  I  pre- 
fer to  state  the  conclusions  of  Mr.  Nimmo,  from  whom  I  have  frequently 
quoted  during  this  argument  and  whom  I  quote  with  the  more  satisfac- 
tion, because  I  think  he  has  given  the  matter  as  careful  study  perhaps  as 
any  man  investigating  it  outside  of  railroad  circles.  As  will  be  seen  by 
his  reports,  he  devoted  at  least  eight  years  to  a  scientific  and  practical 
study  of  this  problem.  The  history  of  every  pool,  the  results  of  every 
pooling  arrangement  almost,  are  to  be  found  in  the  tables  and  statistics 
of  his  internal  commerce  reports  from  1879  to  1884.  The  conclusions  of 
such  an  investigator  are  entitled  to  weight,  and  as  they  are  clearly  and 
tersely  stated  and  coincide  entirely  with  my  own,  I  wish  to  adopt  them. 

In  conclusion  the  following  general  observations  may  be  made  in  regard  to  railroad 
federations  or  pooling  organization-: 

First.  They  have  been  instrumental  in  preventing  unjust  discriminations  through 
special   secret   rates  to   favored  shippers,   and  the  consequent  demoralization  ot  trade. 

Second.  They  have  prevented  many  unjust  and  ruinous  discriminations  against  towns 
and  cities,  and  against  particular  States  or  sections  of  the  country. 

Third.     They  have  put  a  stop  to  violently  fluctuating  rates. 

Fourth.  They  have  had  the  effect  of  protecting  the  weaker  lines  and  of  preventing 
their  absorption  by  the  stronger  lines,  and  thus  of  conserving  elements  of  competition  in 
transportation. 

Fifth.  By  preventing  the  absorption  of  the  weaker  by  the  stronger  lines;  they  have 
prevented  the  threatened  danger  to  the  country  of  its  being  districted  among  a  few  great 
corporations,  by  which  means  the  regulating  influence  of  the  competit'on  of  trade  forces 
would  have  been  eliminated,  and  transportation  would  have  got  the  mastery  of  trade. 

Sixth.  They  have  tenced  to  prevent  those  shocks  to  the  financial  interests  of  the 
country  which  generally  accompany  the  bankruptcy  of  great  railroad  corporations. 

Seventh.  Since  they  have  been  adopted  the  railroad  transportation  facilities  of  the 
country  have  been  greatly  extended.  The  volume  of  traffic  has  also  enormously  increased, 
and  rates  have  constantly  fallen.  These  facts  seem  to  prove  that  railroad  federation  has 
not  had  the  effect  of  obstructing  the  beneficial  operation  of  the  competition  of  trade  forces 
and  of  the  direct  competition  between  transportation  lines.  Statistics  hereinbefore  pre- 
sented clearly  indicate  this  fact. 

Eighth.  The  most  hopeful  aspect  of  federations  for  the  division  or  pooling  of  traffic 
is  that  thereby  the  railroads  have  been  brought  to  a  condition  in  which  their  accountibility 
to  the  public  interests  maybe  more  clearly  defined,  and  in  which  any  departure  from  un- 
doubted principles  of  light  can  be  observed  and  the  responsibility  therefore  located.  It  is 
believed  to  be  much  easier  to  regulate  great  federations  of  railroads  with  respect  to  mat- 
ters relating  to  commerce  among  the  States  than  to  regulate  a  great  number  of  railroads 
acting  independently,  for  the  reason  that  these  federations  constitute  concrete  expressions 
of  re'ationships  and  antagonisms  both  among  railroads  and  among  trade  centers,  and  tend 
to  illustrate  the  relative  force  of  the  same. 

Ninth.  Railroad  pools  have  not  proved  to  be  rigid  compacts,  but  they  have  been  con- 
stantly subject  to  change.  Occasional  and  even  protracted  wars  of  rates  render  their  re- 
quirements at  times  almost  entirely  inoperative.  This  must,  in  the  light  of  public  interests, 
be  regarded  as  a  favorable  symptom  of  their  practical  workings.  The  conditions  surround- 
ing and  governing  the  commercial  and  transportation  interests  of  the  country  arc  constantly 
subject  to  change,  and  it  is  impracticable  that  any  fixed  rates  or  set  of  rules  should  be 
formulated  which  in  practice  would  tend  to  prevent  such  changes. 

The  Senator  from  Massachusetts  [Mr.  Hoar]  asks  me  if  I  have  in 
my  mind  statistics  bearing  on  the  point  as  to  whether  the  net  receipts  of 
the  railroad  companies  pay  more  on  the  average  than  a  fair  rate  upon  the 
capital  invested.  I  think  that  was  the  question.  I  have  not  the  exact 
figures.  I  sent  home  to  Connecticut,  my  own  State;  I  found  this  to  be 
true  of  Connecticut,  that  the  amount  paid  as  dividends  upon  railroad 
stock  in  the  State  of  Connecticut  during  the  past  year  would  average 
upon  the  whole  capital  stock  of  Connecticut  railroads  about  4£  per  cent. 
Of  course  some  roads  do  not  pay  any,  and  one  pays  as  high  as  10  per  per 
cent.,  but  the  average  upon  the  capital  stock  of  all  railroads  in  the  State 


80  INTER -STATE    COMMERCE    LAW. 

would  be  44-  per  cent.  The  statistics  for  the  whole  country  are  not  accur- 
ately in  my  mind  at  this  time,  but  I  think  I  will  venture  upon  my 
recollection  to  saythat  the  entire  railroad  dividends  of  the  United  States  in 
the  year  1885  applied  to  the  entire  capital  stock  of  the  railroad  compa- 
nies of  the  United  States  would  produce  a  dividend  of  about  2+  per  cent. 

Mr.  Hoar.     Do  you  mean  stock  unwatered? 

Mr.  Platt.  I  mean  the  stock  as  it  stands,  watered,  if  it  has  been 
watered,  and  undoubtedly  it  has  been.  The  Senator  from  Colorado  [Mr. 
Teller]  says  that  is  true  in  all  cases.  I  think  it  is  not  universally  true. 
Here  is  a  railroad  running  into  "Washington — the  Baltimore  and  Ohio — 
that  has  not  increased  its  capital  stock  in  many  years,  which  has  to-day, 
as  I  remember,  only  twenty  millions  of  capital  stock,  though  its  property 
equals  in  value  the  property  of  roads  whose  capital  is  three  or  four  times 
as  much.  It  is  not  true  in  a  good  many  instances  that  might  be  men- 
tioned. It  is  lamentable  that  it  is  too  true  in  this  country,  but,  as  I  said, 
the  discussion  of  what  rate  of  interest  shall  be  paid  upon  the  capital  as  it 
stands,  including  water,  is  outside  of  this  discussion  which  I  am  now 
carrying  on.  I  should  say  as  severe  things  on  that  subject  probably  as 
any  member  of  the  Senate.  I  should  be  glad  if  there  was  some  way  to 
eliminate  fictitious  capital.  I  might  regard  competition  as  a  blessing  if 
when  it  bankrupted  a  railroad  management  the  water  should  be  elimina- 
ted before  another  management  was  set  on  foot;  but  that  never  will  be. 
Mr.  President,  I  have  heard  it  suggested  in  reply  to  all  this  that  we  can 
pass  this  law  and  then  pass  another  law  directing  the  commission  to  in- 
vestigate; and  if  the  commission  shall  on  the  whole  conclude  on  its  inves- 
tigations that  pooling  arrangements  are  not  injurious  to  the  public 
welfare,  then  we  can  repeal  the  section  prohibiting  pooling.  That  is  after 
the  fashion  of  what  is  known  in  Scotland  as  Jedburgh  justice,  for  bor- 
der marauders,  "hang  them  first,  try  them  afterwards."'  That  is  not  a 
correct  principle  in  legislation.  We  had  better  investigate  first.  All  in- 
vestigation so  far,  the  weight  of  all  testimony,  the  weight  of  all  the  tes- 
timony of  students  who  have  given  the  most  attention  to  this  problem, 
and  the  weight  of  the  best  informed  railroad  officers  and  railroad  com- 
missioners, shows  the  wisdom  of  legalizing  and  regulating,  rather  than 
prohibiting  pooling. 

I  suppose  that  Senators  will  rise  and  tell  me  of  specific  instances 
where  justice  has  not  been  done  to  localities  or  to  individuals  under  pools. 
I  reply  first,  legalize  them  and  then  regulate  them  by  this  commission 
and  the  evils  will  disappear.  They  are  not  inherent  in  the  system.  I  re- 
ply, second,  those  evils  would  not  be  remedied  by  prohibitions  of  pool- 
ing. They  would  exist  still  and  be  intensified.  Do  not  charge  upon 
the  pool  that  for  wThich  it  is  not  responsible.  Do  not  make  it  criminal  to 
engage  in  such  contracts  because  certain  things  occur,  not  chargeable  to 
them,  which  you  do  not  like. 

The  issue  here,  however,  is  not  between  legalizing  immediately  and 
prohibiting.  It  is  between  the  proposition  now  before  the  Senate  and 
the  Senate  bill,  which,  very  properly  in  my  judgment,  sought  to  refer 
this  matter  for  further  investigation  to  the  commission  to  be  appointed 
under  the  bill.  I  submit  to  the  Senate  that  a  majority  of  its  Senators  to- 
day believes  that  it  is  the  wise  thing  to  do  ;  that  the  intelligent  judgment 
of  Senators  must  bring  them  to  this  conclusion.      If  it  is  wise,  why  sur- 


INTER -STATE    COMMERCE    LAW.  81 

render  it?  Shall  we  surrender  it  for  the  fear  that  if  we  do  the  wise  thing 
here  there  may  be  obstinacy  elsewhere  which  shall  prevent  any  legisla- 
tion at  all  ?  If  that  principle  is  to  be  adopted,  then  we  are  driven  to  this 
in  the  Senate,  that  whenever  any  legislation  upon  any  subject  is  desir- 
able and  we  have  determined  what  legislation  is  wise,  and  politic,  and 
just,  we  are  to  surrender  our  views  as  to  that  and  agree  to  legislation 
which  we  deem  impolitic,  unwise  and  unjust,  because  otherwise  we  can 
not  get  any  legislation  at  all. 

Mr.  President,  others  may  yield  their  judgment  upon  what  they  con- 
sider vital  matters  for  the  purpose  of  getting  some  kind  of  legislation, 
but  for  one  I  am  content  to  stand  and  take  the  judgment  of  the  country 
upon  my  action  when  I  vote  only  for  what  upon  mature  deliberation  I 
believe  is  the  best  legislation.  I  do  not  believe  that  the  legislation  will 
fail  if  this  bill  goes  back  to  a  conference  with  an  indication  that  the 
Senate  will  not  consent  to  brand  as  criminal  practices  those  arrangements 
which  railroads  have  made  to  accomplish  the  precise  object  which  is 
intended  to  be  accomplished  by  legislation  in  this  bill.  I  believe  we  may 
trust  to  the  good  judgment  of  conferees  and  of  legislators  not  to  do  a 
thing  which,  upon  reflection  and  investigation,  they  must  be  satisfied 
will  probably,  I  may  say  almost  inevitably,  break  up  and  demoralize  the 
existing  conditions  of  railroad  service  in  this  country. 

Nine-tenths  of  all  the  interstate-commerce  business  done  to-day  is 
done  under  those  arrangements  which  are  sought  to  be  damned  because 
of  the  evil  meaning  which  has  been  given  to  the  word  "pooling." 

Whatever  of  stability  has  been  given  to  the  railroad  business,  and 
through  it  to  other  business  of  the  country,  has  been  secured  by  these 
traffic  arrangements,  and  in  my  judgment  a  bill  which  breaks  them  all 
up  ruthlessly  within  sixty  days,  which  invites  the  competition  which  is 
to  demoralize  business,  will  be  far-reaching  in  its  injurious  results.  For 
one,  I  prefer  to  stand  by  my  judgment,  I  will  try  to  have  the  courage 
of  my  convictions.  I  will  try  to  do  what  I  believe  to  be  right,  and  I  can 
not  assent  to  a  bill,  which,  though  I  accept  its  other  provisions,  I  believe 
to  contain  a  provision  which  I  regard  as  positively  vicious  and  wrong. 


REMARKS  OF  MR.  CULLOM, 
In  the  U.  S.  Senate  January  10,  1887. 

THE  LONG  AND  SHORT  HAUL  CLAUSE. 

Mr.  Cullom. — Mr.  President,  I  have  not  risen  for  the  purpose  of 
making  a  general  speech  upon  this  subject.  I  have  been  more  inclined 
to  say  nothing  on  the  subject  than  to  occupy  anytime  whatever;  but  cer- 
tain portions  of  the  bill  as  reported  by  the  conference  committee  have 
been  very  fiercely  attacked,  and  seem  to  be  in  a  measure  misunderstood 
in  my  judgment,  so  that  I  have  felt  called  upon  to  give  expression  to  my 
views  on  one  section  of  the  bill  alone  at  present.  What  I  shall  say  to-day 
will  be  confined  substantially  to  a  discussion  of  the  meaning  of  the  fourth 
section  of  the  bill.  It  may  be  that  before  the  discussion  is  closed  I  shall 
have  something  to  say  upon  other  portions  of  the  bill,  but  at  present  I 
shall  confine  my  remarks  to  the  fourth  section. 

Mr.  President,  the  regulation  of  interstate  railroad  transportation  is 
a  subject  that  occupies  a  very  conspicuous  place  in  the  thoughts  of  the 
American  people.  The  magnitude  of  the  vast  interests  to  be  affected  by 
such  regulation  makes  it  necessary  that  the  legislation  proposed  on  the 
subject  should  receive  the  most  thoughtful  and  deliberate  consideration, 
for  the  commerce  and  prosperity  of  the  entire  country  may  be  affected 
favorably  or  unfavorably,  as  the  case  may  be,  by  the  character  of  the 
regulations  which  Congress,  in  the  exercise  of  its  undoubted  right  to 
regulate,  may  see  fit  to  impose  upon  interstate  transportation  by  railroad. 
I  recognize  the  importance  and  the  great  propriety  of  a  full  and  free  dis- 
cussion of  the  measure  now  before  the  Senate,  which  may  be  so  far- 
reaching  in  its  consequences,  and  I  am  anxious  that  the  effect  and  mean- 
ing of  the  provisions  of  the  bill  shall  be  fully  understood,  in  order  that 
the  Senate  may  act  upon  it  intelligently. 

Since  the  report  of  the  conference  committee  was  made  public  the 
bill  as  it  now  stands  has  been  critically  analyzed  by  the  ablest  representa- 
tives of  the  various  interests  that  will  be  most  affected  by  its  passage,  in 
case  it  shall  become  a  law,  and  has  received  a  great  deal  of  attention 
from  the  press  and  from  the  general  public.  It  seems  to  me  that  the  bill 
has  stood  the  test  of  this  general  and  critical  scrutiny  remarkably  well. 
Its  general  provisions  seem  for  the  most  part  to  have  met  with  approval, 
while  the  feature  which  has  been  most  strongly  objected  to  seems  to 
have  been  misunderstood,  if  not  misrepresented,  and  it  is  this  feature 
onty  which  I  desire  now  to  undertake  to  explain. 

I  have  not  had  time  to  carefully  read  all  the  numerous  expressions 
of  opinion  upon  the  bill  that  have  come  under  my  notice,  but,  so  far  as 
I  have  been  able  to  do  so,  it  appears  that  the  railroad  managers  and 
others  prominently  identified  with  railroad  interests  who  have  expressed 
their  views  publicly  have  directed  their  attacks  almost  wholly  upon  the 
"short-haul"  section  and  the  one  prohibiting  pooling.  For  the  most 
part  they  criticise  these  sections  and  express  alarm  at  their  supposed 

82 


INTER -STATE    COMMERCE    LAW.  83 

effect  upon  the  country,  but  take  pains  to  explain  with  more  or  less 
qualification  that  they  approve  the  general  scope  of  the  bill,  or  at  least 
they  do  not  seriously  object  to  its  other  provisions. 

If  the  very  able  gentlemen  who  manage  the  railroads  of  the  United 
States  find  only  two  points  of  serious  attack  in  a  measure  which  is 
intended  to  bring  about,  in  many  important  particulars,  a  reversal  of  ex- 
isting railway  practices  and  methods  of  management,  we  have  a  right  to 
assume  that  the  bill  is  not,  aside  from  the  features  which  they  specially 
criticise,  unduly  oppressive  toward  the  railroads,  or  very  far  from  right 
in  its  main  provisions  and  regulations.  And  if  these  gentlemen  are  mis- 
taken in  their  view  of  the  probable  effect  of  the  two  features  which  they 
attack,  their  objections  to  the  enactment  of  the  proposed  law  fall  to  the 
ground.  I  think  they  are  mistaken,  and  that  this  will  be  made  to  appear 
during  the  course  of  the  present  debate;  but,  if  I  am  mistaken  and  they 
are  correct,  I  would  be  unwilling  to  give  the  measure  my  support. 

STATE    LEGISLATION    NECESSARY    TO    RENDER    THE    LAW    OF    CONGRESS 

EFFECTIVE. 

It  must  be  borne  in  mind,  however,  that  any  measure  which  Con- 
gress can  enact  upon  this  subject  may  prove  to  some  extent  ineffective 
and  unsatisfactory  until  it  has  been  supplemented  by  similar  State  legis- 
lation, just  as  the  State  legislation  now  in  force  in  many  of  the  States  has 
been  found  ineffective  and  unsatisfactory  in  some  respects  because  of  the 
absence  of  national  legislation.  There  is  no  way  in  which  the  entire  in 
ternal  commerce  of  the  country  can  be  subjected  at  once  to  the  same 
uniform  plan  of  regulation  under  the  Constitution  as  it  stands.  Much  of 
this  commerce  is  beyond  the  jurisdiction  of  Congress,  but  if  we  will 
apply  just  and  proper  regulations  to  the  interstate  commerce  now  subject 
to  our  control  under  the  Constitution,  I  am  satisfied  that  within  a  few 
years  the  States  which  have  not  already  done  so  will  enact  similar  regu- 
lations, and  that  eventually  the  entire  internal  commerce  of  the  country 
will  be  placed  under  a  substantially  uniform  plan  of  regulation. 

Until  that  time  comes,  however,  it  may  be  possible  for  the  railroads 
to  obstruct  and  interfere  with  the  successful  operation  of  the  law  to  some 
extent,  because  of  the  divided  jurisdiction  of  the  States  and  the  general 
government  over  the  subject,  in  case  the  railroads  should  not  be  disposed 
to  accept  in  good  faith  the  regulations  Congress  may  impose  upon  them. 
But  I  do  not  look  for  factious  or  unreasonable  opposition  on  the  part  of 
the  leading  railroads  of  the  country.  When  once  the  bill  goes  into  force, 
if  it  should  become  a  law,  I  believe  that  the  railroads  will,  as  a  rule,  seek 
to  give  the  law  a  fair  interpretation  and  endeavor  to  live  up  to  it. 

UNJUST  DISCRIMINATION  PROHIBITED. 

But,  however  that  may  prove  to  be,  we  must  expect  a  great  deal  of 
friction  in  attempting  to  put  into  practical  operation  a  new  and  heretofore 
untried  system  of  regulation —untried,  at  least,  as  to  the  interstate  com- 
merce of  the  United  States.  The  questions  that  may  arise  can  not  possi- 
bly all  be  foreseen  or  guarded  against.  The  requirements  of  the  bill 
against  unjust  discrimination  and  favoritism  as  between  persons,  places, 
and  particular  classes  of  traffic  will  pinch  very  hard  in  a  good  many 
quarters.     The  "  big  fish"  will  be  placed  upon  an  equality  with  the  little 


84  INTER -STATE    COMMERCE    LAW. 

ones,  or  more  nearly  so,  and  we  must  be  prepared  to  hear  very  energetic  and 
very  vigorous  protests  from  those  who  have  been  enjoying  alf  kinds  of 
special  privileges  and  advantages  at  the  expense  of  the  general  public, 
and  who  will  be  convinced  that  the  country  is  going  to  everlasting  smash 
if  their  privileges  are  cut  off.  But  I  take  it  that  it  is  our  duty  to  legislate 
here  with  a  view  to  securing  the  greatest  good  to  the  greatest  number, 
and  I  have  faith  that,  if  the  legislation  now  proposed  can  be  fairly  tested, 
its  enactment  will  prove  beneficial  alike  to  the  railroads  and  to  the  gen- 
eral public  when  it  is  once  fairly  in  operation  and  when  business  has  ad- 
justed itself  to  the  changed  conditions  which  it  will  bring  about. 

I  come  now  to  the  consideration  of  the  much  debated  ' '  short-haul " 
section. 

The  objection  made  to  this  section  as  it  now  stands,  which,  if  it  were 
well  founded,  I  should  regard  as  the  most  serious,  is  that  it  is  indefinite 
and  ambiguous,  that  it  is  open  to  more  than  one  construction.  Of  course, 
we  can  not  undertake  to  say  positively  what  construction  will  be  put 
upon  the  language  used  by  the  courts  if  they  shall  be  called  upon  to  de- 
termine the  meaning  of  the  section.  It  seems  to  me,  however,  that  but 
one  construction  can  be  reasonably  and  properly  placed  upon  this  sec- 
tion, especially  when  it  is  considered,  as  it  must  be,  in  connection  with 
the  other  provisions  of  the  bill,  and  that  its  meaning  is  perfectly  clear. 
But  in  view  of  the  erroneous  construction  that  seems  to  have  been  put 
upon  this  section  in  some  quarters  I  deem  it  proper  to  state  that  there 
seems  to  be  no  difference  of  opinion  as  to  its  meaning  among  the  con- 
ferees on  the  part  of  the  Senate.  I  do  not  know  that  I  ought  to  say  this, 
but  I  venture  to  do  so;  and  yet  it  may  be  that  as  to  the  minutias  of  my 
statement  the  other  conferees  of  the  Senate  may  not  agree  with  me. 

I  think  the  Senator  from  Connecticut  [Mr.  Platt]  and  the  Senator 
from  Tennessee  [Mr.  Harris]  understand  the  section  as  I  do,  and  I  think 
I  am  justified  in  saying  that  we  would  not  approve  it  if  we  supposed  or 
believed  it  to  mean  what  some  have  claimed  that  it  does  mean  or  may  be 
made  to  mean. 

a  greater  sum  can  not  be  charged  for  a  shorter  than  for  a 
longer  distance. 
The  short-haul  section  simply  undertakes  to  lay  down  in  specific 
terms  a  rule  or  principle  which,  as  I  have  always  contended,  is  already 
in  effect  contained  in  other  provisions  of  the  bill.  The  first  requirement 
of  the  bill  on  the  subject  of  rates  is  found  in  the  first  section,  and  is  that 
all  rates  shall  be  "reasonable  and  just."  This  is  in  effect  a  declaration 
that  under  similar  circumstances  and  conditions  a  greater  sum  shall  not 
be  charged  for  a  shorter  than  for  a  longer  distance,  because  under  such 
circumstances  it  would  not  be  "reasonable  and  just"  to  make  such  a 
charge.  The  next  requirement  of  the  bill  that  affects  this  question  is 
found  in  the  first  part  of  the  third  section,  which  declares — 

That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of  this  act 
to  make  or  give  any  undue  or  unreasonable  preference  or  advantage  to  any  particular  per- 
son, company,  firm,  corporation,  or  locality,  or  any  particular  description  of  traffic,  in  any 
respect  whatsoever,  or  to  subject  any  particular  person,  company,  firm,  corporation,  or 
locality,  or  any  particular  description  of  traffic,  to  any  undue  or  unreasonable  prejudice  or 
disadvantage  in   any  respect  whatsoever. 

This  is  likewise  a  declaration  that  a  greater  sum  shall  not  be  charged 


INTER -STATE    COMMERCE    LAW.  85 

for  a  shorter  than  for  a  longer  haul  under  similar  circumstances  and  con- 
ditions, because  such  a  charge  would  be  the  making  or  giving  of  an  "un- 
due or  unreasonable  preference  or  advantage"  to  one  particular  "  local- 
ity," or  would  subject  some  other  particular  "locality"  to  an  "undue 
or  unreasonable  prejudice  or  disadvantage." 

Now  let  us  see  what  section  4  says  and  means.     It  reads  as  follows: 

Sec.  4.  That  it  shall  be  unlawful  for  any  common  earner  subject  to  the  provisions  of 
this  act  to  charge  or  receive  any  greater  compensation  in  the  aggregate  for  the  transpor- 
tation of  passengers  or  of  like  kind  of  property,  under  substantially  similar  circumstances 
and  conditions,  for  a  shorter  than  for  a  longer  distance  over  the  same  line,  in  the  same 
direction,  the  shorter  being  included  within  the  longer  distance;  but  this  shall  not  be  con- 
strued as  authorizing  any  common  carrier  within  the  terms  of  this  act  to  charge  and  receive 
as  great  compensation  for  a  shorter  as  for  a  longer  distance:  Provided,  however,  That 
upon  application  to  the  commission  appointed  under  the  provisions  of  this  act,  such  com- 
mon carrier  may,  in  special  cases,  after  investigation  by  the  commission,  be  authorized  to 
charge  less  for  longer  than  for  shorter  distances  for  the  transportation  of  passengers  or 
property;  and  the  commission  may  from  time  to  time  prescribe  the  extent  to  which  such 
designated  common  carrier  may  be  relieved  from  the  operation  of  this  section  of  this  act. 

A   GREATER  AGGREGATE  SUM    SHALL   NOT   BE   CHARGED   FOR  A  SHORTER 

THAN     FOR    A    LONGER    DISTANCE    OVER    THE    SAME    LINE     IN 

THE    SAME    DIRECTION. 

As  I  understand  it,  this  section  as  it  now  stands  simply  prohibits  a 
railroad  corporation  from  charging  a  greater  aggregate  sum — not  a 
higher  rate— for  a  shorter  than  for  a  longer  distance  over  the  same  line, 
in  the  same  direction,  and  under  substantially  similar  circumstances  and 
conditions,  when  the  shorter  is  included  within  the  longer  distance.  There 
is  no  other  prohibition  made  in  positive  terms.  The  declaration  that 
' '  this  shall  not  be  construed  as  authorizing  any  common  carrier  within 
the  terms  of  this  act  to  charge  and  receive  as  great  compensation  for  a 
shorter  as  for  a  longer  distance  "  does  not  in  terms  prohibit  the  charging 
as  much  for  a  shorter  as  for  a  longer  distance,  but  simply  withholds  the 
legislative  sanction  from  the  making  of  such  a  charge.  This  qualifying 
clause  negatives  the  inference  that  might  possibly  be  drawn  from  the 
language  of  the  section  without  these  words,  namely  :  that  an  equal 
charge  for  a  shorter  distance  is  authorized  by  inference  because  only  a 
greater  charge  is  prohibited.  This  qualification,  therefore,  leaves  the 
question  of  whether  an  equal  amount  can  be  charged  for  the  shorter  dis- 
tance to  be  determined  by  the  provisions  of  the  bill  to  which  I  have 
already  referred,  requiring  all  charges  to  be  reasonable,  and  forbidding 
the  giving  of  an  unreasonable  preference  or  advantage  to  any  particular 
locality. 

ALL  CHARGES  MUST  BE  REASONABLE. 

Mr.  Hoar. — I  should  like  to  inquire  of  the  Senator  from  Illinois, 
with  his  permission,  if  he  understands  that  the  interpretation  of  the  lan- 
guage of  this  bill  that  it  only  prohibits  the  charging  a  larger  gross  sum 
for  the  shorter  than  for  the  longer  distance,  and  does  not  prohibit  a 
larger  proportionate  charge  for  the  shorter  than  the  longer  distance,  is  the 
sense  in  which  the  House  of  Representatives,  as  represented  by  their  con- 
ferees, understand  the  bill,  so  far  as  he  is  informed  ? 

Mr.  Cullom. — I  have  no  question  but  that  every  member  of  the 
conference  committees  of  both  Houses  unqualifiedly  and  without  mistake 
understands  this  not  to  be  a  prorate  per  ton  per  mile  law,  but  that  the 


86  INTER -STATE    COMMERCE    LAW. 

corporations  shall  not  be  allowed  to  charge  in  the  aggregate,  in  the  sum 
total,  the  same  amount  for  the  short  as  for  the  longdistance,  unless  under 
certain  circumstances. 

The  requirements  of  the  fourth  section,  then,  is  that  as  between  ship- 
ments of  the  same  kind  in  the  same  direction  over  the  same  line,  and 
made  under  substantially  similar  circumstances  and  conditions,  a  greater 
sum  shall  not  be  charged  for  a  shorter  than  for  a  longer  haul  when  the 
shorter  comprises  part  of  the  longer  haul — not  that  a  higher  rate  shall  not 
be  charged  per  mile,  but  that  a  greater  aggregate  sum  shall  not  be 
charged.  And  I  desire  to  say  here,  Mr.  President,  that  one  of  the  ele- 
ments of  opposition  to  this  bill  throughout  the  country  has  been  the 
result  of  a  misrepresentation  of  the  meaning  of  the  fourth  section  of  the 
bill.  There  has  seemed  to  be,  on  the  part  of  those  who  want  no  legisla- 
tion, a  determination  that  that  section  of  the  bill  shall  be  construed  into 
a  pro-rate-per-mile  section,  when  I  undertake  to  say  that  no  man  who 
has  been  on  the  committee  ever  dreamed  that  the  language  which  is  used 
in  that  section,  and  which  has  been  used  in  it  from  the  beginning  since 
the  select  committee  reported  the  bill  to  the  Senate,  could  have  that  con- 
struction placed  on  the  words  used. 

Me,  Mitchell,  of  Oregon. — Section  4  reads  : ' 

That  it  shall  be  unlawful  for  any  common  carri  r  subject  to  the  provisions  of  this  act 
to  charge  or  receive  any  greater  compensation  in  the  aggregate  for  the  transportation  of 
passengers  or  of  like  kind  of  property,  under  substantially  similar  circumstances  and  con- 
ditions, etc. 

What  I  want  to  get  at  is  the  meaning  of  these  words  ' '  under  sub- 
stantially similar  circumstances  and  conditions  for  a  shorter  than  for  a 
longer  distance  on  the  same  line,  *  *  *  *  the  shorter  being  included 
within  the  longer  distance."  To  explain  what  I  desire  to  get  at,  I  will 
make  this  inquiry  of  the  chairman  of  the  committee  :  Take  a  long  haul, 
from  San  Francisco  to  Portland,  Oreg.,  over  a  railroad  running  from 
San  Francisco  to  Portland.  Transportation  by  rail  over  a  route  like 
that,  of  course,  is  affected  to  a  certain  extent  by  steamship  competition, 
by  steamers  running  between  the  terminal  points.  Now  suppose  a  short 
haul,  between  points  intermediate  of  those  two  terminal  points,  say  from 
Stockton  to  Roseburgh  ;  would  that  come  within  the  provisions  of  the 
section  ?  Would  that  short  haul,  included  in  this  long  haul,  be  subject 
to  the  influence  of  steamboat  competition  ?  Is  that  a  haul  "under  sub- 
stantially similar  circumstances  and  conditions"  as  the  haul  over  the 
whole  line  of  road  ? 

Mr.  Cullom.  I  will  touch  upon  that  subject  briefly  in  what  I  have 
to  say,  and  shall  answer  the  Senator  from  Oregon  in  the  course  of  my 
remarks. 

THE  COMMISSION   MAY  GIVE  RELIEF  WHERE  TRANSPORTATION  IS 
EFFECTED  BY  STEAMSHIP  COMPETITION. 

Mr.  Mitchell,  of  Oregon.  I  am  inquiring  for  information.  I 
have  not  yet  made  up  my  mind  as  to  the  construction  of  this  bill. 

Mr.  Cullom.  I  am  not  objecting  to  the  Senator's  inquiry.  I  was 
going  to  say  that  I  shall  discuss  that  point  briefly  in  what  I  say;  but  in 
answer  to  the  Senator  I  have  this  to  say  now:  that  the  words  "substan- 
tially similar  circumstances  and  conditions"  are  words  of  very  great  im- 


INTER -STATE    COMMERCE    LAW.  87 

portance,  and  words  which  may  be  taken  for  what  they  say  by  a  court  or 
by  a  commission  who  may  have  something  to  do  with  the  construction 
of  the  law.  Whether  the  section  should  be  constructed  so  as  to  give  re- 
lief as  to  the  water  point  of  competition  that  the  Senator  refers  to,  or 
not,  the  section  itself  does  provide  that  at  such  a  competing  point,  if  the 
fact  does  exist,  the  interstate  commission  shall  have  the  power  to  give  re- 
lief upon  a  showing  of  the  proper  state  of  facts. 

Mr.  Hoar.     The  power  of  suspension  is  given  in  a  special  case. 

Mr.  Cullom.  And  of  course  every  case  of  the  kind  would  be  a 
special  case,  if,  in  the  judgment  of  the  commission,  it  was  deemed  ne- 
cessary to  relieve  the  railroad  company  at  that  particular  competing  point 
from  the  operation  of  the  law.  • 

Mr.  Harris.  It  does  not  refer  to  one  single  shipment,  but  to  the  es- 
tablishment of  a  rule  by  the  commission. 

Mr.  Cullom.     Of  course  a  rule  applying  to  all  alike. 

Mr.  Hoar.  I  will  put  an  illustration.  The  port  of  Boston,  in 
Massachusetts,  has  a  foreign  commerce  of  about  $125,000,000  annually. 
It  was  larger  than  that  three  or  four  years  ago,  but  the  change  is  not  in 
the  amount  of  commerce,  but  in  the  value  of  the  articles  exported  and 
imported.  That  was  the  amount  last  year.  Now,  probably,  of  the  ex- 
ports, which  are  seventy  odd  millions  of  dollars,  between  thirty  and 
forty  millions  consist  of  cotton,  cattle,  wheat,  corn,  hams  and  bacon, 
and  lard — the  food  products  of  the  West  and  the  cotton  of  the  South. 
Every  ton  of  that  produce  exported  to-day  I  suppose  is  taken  from  a 
place  in  the  country  which  is  from  150  to  250  miles  nearer  to  New  York, 
Philadelphia,  and  Baltimore.  Now,  the  railroads  give  a  rebate  of  five 
per  cent,  on  all  those  exported  articles.  On  that  export  trade  of  course 
depends  a  corresponding  import  trade,  which  otherwise  we  should  not 
get  at  that  port. 

Have  we  got  under  this  bill  to  put  down  all  the  local  business  of 
Massachusetts,  the  cotton  which  is  taken  to  her  factories  to  be  used  there 
and  the  food  products  which  are  brought  to  feed  her  people,  to  the  New 
York  rates,  that  is  to  the  rates  of  carriers  who  do  not  have  to  carry  the 
goods  so  far  by  250  miles;  or  have  we  got  to  give  up  that  export  trade; 
or  is  this  great  export  trade  of  the  second  commercial  city  of  the  country 
to  depend  on  whether  five  commissioners  happen  to  think  that  is  or  is 
not  a  special  case? 

THE  SAME  RATE  MAY  BE  CHARGED  FROM  THE  WEST  TO  BOSTON  AS  TO 
NEW  YORK. 

Mr.  Cullom.  Mr.  President,  it  may  be  said  to  be  rather  unfortu- 
nate that  Boston  is  a  little  farther  away  from  the  center  of  gravity  than 
New  York;  but  I  do  not  think  myself  that  there  is  anything  in  this  bill 
which  prohibits  a  railroad  from  carrying  to  Boston  just  as  cheaply  as  it 
carries  to  New  York  from  Chicago  or  Omaha  or  San  Francisco,  and  there 
is  not  anything  now  that  prevents  it. 

Mr.  Hoar.  I  do  not  think  the  Senator  quite  apprehends  the  force 
of  my  statement.  The  bill  does  not  make  New  York  a  comparison;  but 
does  it  not  say  that  a  company  shall  not  carry  over  the  same  line  of  road 
to  other  points  in  Massachusetts  the  same  article  at  a  larger  price  than  it 
charges  this  foreign  commerce — that  is  the  proposition — unless  the  com- 


88  INTER- STATE    COMMERCE    LAW. 

missioners  come  in  and  make  an  exception?  Then  the  railroads  have  got 
to  put  down  the  whole  railroad  transportation  in  cotton  and  food  pro- 
ducts in  Massachusetts  along  their  lines  to  the  JS  ew  York  rates  if  they 
put  down  the  exports  from  Boston  to  the  New  York  rates,  and  that  they 
can  not  do  under  the  laws  of  trade,  because,  of  course,  the  other  road, 
which  is  230  miles  nearer,  has  the  advantage. 

Mr.  Cullom.  So  far  as  this  section  is  concerned,  when  a  load  of 
corn,  wheat,  cattle,  or  what  not,  is  started  from  Chicago,  there  is  noth- 
ing in  this  bill  that  prohibits  the  transportation  company  taking  the  pro- 
duct in  a  car  from  Chicago  at  exactly  the  same  rate  to  Boston  that  it 
takes  it  to  New  York — not  a  single  line.  The  only  question,  then,  is  a 
question  as  to  whether  the  railroads  will  carry  the" products  as  cheaply 
to  Boston  as  to  New  York.    In  my  own  judgment  they  will. 

Mr.  Hoar.  My  friend  does  not  still  answer  the  question.  Do  you 
not  prohibit  them  from  carrying  it  to  Boston  at  a  less  rate  than  they 
carry  it  to  Springfield,  or  Worcester,  or  Fall  River,  or  to  any  other  point 
on  the  line  in  Massachusetts? 

Mr.  Cullom.    At  a  less  rate,  yes. 

Mr.  Hoar.  That  is  exactly  the  point.  We  have  got,  therefore, 
have  we  not,  under  your  bill  to  put  down  Worcester  and  Springfield 
and  Fall  River  to  the  New  York  rate,  or  else  Boston  can  not  have  the 
exports? 

Mr.  Cullom.  Has  the  Senator  any  objection  to  having  the  rate  put 
down?  Is  there  any  reason  why  the  rates  to  New  York  and  Boston 
should  not  be  the  same? 

Mr,  Hoar.  The  roads  can  not  live  at  those  rates.  My  friend  has 
got  in  his  bill  the  general  provision  that  they  shall  not  charge  anything 
more  than  what  is  reasonable  to  those  places.  You  have  got  the  thing 
down  under  the  operation  of  your  bill  to  what  is  reasonable  as  an  inde- 
pendent proposition. 

Mr.  Cullom.     Has  the  Senator  any  objection  to  that? 

Mr.  Hoar.  Of  course  not.  You  have  got  it  down  to  what  is  rea- 
sonable; now  stop  there.  Then  the  railroad  company  says,  "While  I 
am  doing  this  business  for  all  New  England,  for  all  its  local  uses  of  every 
sort,  food  supply  or  supply  of  materials,  at  a  reasonable  rate  and  no  more, 
which  I  am  bound  to  do,  I  can  in  connection  "with  that  business  take  on 
in  addition,  at  5  per  cent,  rebate,  these  thirty  millions  which  are  going  to 
Europe,  if  you  let  me;  but  if  you  say  I  shall  not  do  that  unless  I  put 
local  rates  for  all  Massachusetts  at  5  per  cent,  below  what  is  reasonable 
for  them,  I  can  not  live,  and  the  whole  business  must  go  to  New  York." 
That  is  the  proposition. 

Now,  a  man  doing  a  business  of  transportation  at  a  fair  rate,  a  rea- 
sonable rate,  and  no  more,  may  very  often  afford  to  take  a  particular 
piece  of  merchandise  or  merchandise  for  a  particular  destination  at  very 
much  less-  than  his  usual  rates.  If  the  Senator  should  engage  to  take  me 
with  a  hack  over  to  Bladensburg  this  morning  and  charge  me  $10  for  it, 
and  that  was  a  reasonable  price  and  no  more,  and  he  should  come  across 
a  man  who  was  on  his  way  there  with  a  carpet-bag  in  his  hand  about  to 
walk,  and  the  man  says,  "  I  have  not  ^ot  but  a  dollar  in  my  pocket  and 
I  will  give  you  that,"  and  he  takes  him  on,  that  does  not  do  me  any 


INTER -STATE    COMMERCE    LAW.  89 

injustice,  it  does  not  do  him  any  injustice,  and  it  does  not  cause  any  loss. 
That  is  the  attitude  of  the  foreign  commerce  of  every  principal  port. 

What  I  want  to  know  of  the  Senator  now  is,  not  to  debate  this  mat- 
ter, but  to  ascertain  the  meaning  of  the  bill.  Do  I  correctly  understand 
him  as  saying  that  the  right  to  continue  that  foreign  commerce,  in  which 
the  condition  is  what  I  have  stated,  to  be  dependent  in  the  future  under 
the  act  of  Congress,  on  the  opinion  of  five  commissioners?  More  than 
that,  is  that  foreign  commerce  to  stop  for  a  while,  to  be  revived  again  a 
few  months  later,  when  the  commission  have  organized  and  got  around 
to  this  matter? 

Mr.  Cullom.  Mr.  President,  it  is  pretty  difficult  to  pass  any  act 
providing  for  any  regulation  whatever  that  may  not  appear  to  harshly 
interfere  with  what  somebody  is  doing.  Now,  so  far  as  I  am  concerned, 
I  have  no  disposition  to  interfere  with  the  foreign  commerce  of  this  coun- 
try. I  would  very  much  prefer  to  see  the  foreign  commerce  increase,  if 
it  can  be  done  consistent  with  the  protection  of  the  great  masses  of  the 
people  of  this  country  outside  of  the  seaports. 

But  here  we  are  met  with  this  condition  of  affairs — unjust  discrimi- 
nation, extortion,  secret  rebates,  and  all  manner  of  unjust  practices  have 
been  going  on  for  years  by  the  railroad  corporations  of  this  country  be- 
cause there  has  been  no  regulation  of  them  by  the  Government  of  the 
United  States.  Now  we  come  in  with  a  bill  that  undertakes,  in  a  mode- 
rate degree  I  think,  to  apply  to  them  some  sort  of  regulation.  We  say 
that  there  shall  be  no  secret  rebates;  we  say  that  there  "shall  be  no  unjust 
discrimination;  we  say  that  there  shall  be  no  extortion.  Then  we  come 
with  the  fourth  section  and  say  that  there  shall  not  be  a  greater  charge 
for  the  shorter  than  for  the  longer  distance  over  the  same  line  under  sub- 
stantially similar  circumstances,  the  shorter  being  included  within  the 
longer,  and  the  property,  of  course,  being  of  like  kind. 

Now,  how  are  we  ever  going  to  regulate  these  railroads  ?  The  Sen- 
ator from  Massachusetts  steps  in  and  says  that  is  going  to  interfere  with 
the  trade  of  Boston;  it  is  going  to  stop' the  export  trade  and  the  import 
trade  that  is  going  on  at  the  city  of  Boston.  I  do  not  know  whether  it 
will  do  so  or  not,  but  I  do  not  believe  it  will  because  those  words,  as  I 
said  awhile  ago,  "under  like  conditions  and  circumstances,"  are  words 
that  the  commission,  that  the  railroad  men,  that  the  courts  are  bound  to 
construe  in  the  most  liberal  manner  consistent  with  the  actual  honest  com- 
merce of  this  country. 

A  LIBERAL  CONSTRUCTION  MUST  BE  PUT  UPON  THE  LAW. 

I  undertake  to  say  that  you  can  not  pass  any  bill  which  will  in  any 
way  restrict  the  traffic  carried  on  by  corporations  unless  you  have  some- 
thing^  that  will  in  some  way  appear  to  interfere  with  localities  or  with 
individual  interests  which  are  being  carried  on.  I  believe  myself  that 
those  words  "  under  similar  conditions  and  circumstances  "  will  open  a 
way,  if  any  way  is  necessary  to  be  opened,  so  that  the  real  commerce 
that  is  being  conducted  by  Boston  or  New  York  or  Philadelphia  or  any 
other  seaport  will  go  on  without  the  slightest  interruption.  I  do  not  be- 
lieve that  the  Senator  will  find  that  his  constituents  in  the  city  of  Boston 
will  be  in  the  slightest  degree  interrupted  in  their  foreign  commerce 
which  they  are  carrying  on  to-day,  even  if  the  very  letter  of  the  law 
should  be  enforced  as  the  fourth  section  declares. 


90  INTER- STATE    COMMERCE    LAW. 

But  I  do  not  believe  it  will  be  enforced  as  the  letter  of  it  reads  in  all 
cases,  but  that  a  proper  and  liberal  construction  will  be  given  by  the 
courts  and  by  the  commission  and  by  the  railroads  themselves  to  the 
words  I  have  referred  to.  My  own  judgment  is  that  if  the  common  car- 
riers of  this  country  proceed  right  along  in  the  discharge  of  their  honest 
duties  as  common  carriers  and  construe  those  words  liberally  so  that  they 
may  carry  the  products  of  the  West  to  the  city  of  Boston  to  be  trans- 
ported to  the  people  on  the  other  side  of  the  water,  there  will  be  no  inter- 
ference with  that  work  by  the  commission,  by  the  courts,  or  hy  anybody 
else.  But  if  we  are  going  to  regulate  these  corporations  at  all,  if  we  are 
going  to  stop  unjust  discrimination  and  the  secret  rebates  by  which 
"towns  are  built  up  and  towns  are  destroyed,  by  which  individuals  are  de- 
stroyed and  individuals  are  built  up,  we  must  have  something  in  the  bill 
which  will  mean  something,  or  else  we  might  as  well  lay  the  bill  on  the 
table  and  go  at  other  business. 

The  limitations  placed  upon  the  prohibition  that  is  made  are  very 
significant,  and  they  must  not  be  overlooked.  They  require  that  in  de- 
termining the  sum  that  may  be  charged  for  a  shorter  as  compared  with  a 
longer  distance,  the  comparison  must  be  made — 

1.  Between  shipments  "of  like  kind  of  property." 

2.  "  Under  substantially  similar  circumstances  and  conditions." 

3.  "  Over  the  same  line." 

4.  "In  the  same  direction." 

5.  When  the  shorter  is  "  included  within  the  longer  distance." 
When  the  act  is  to  be  applied  in  any  given  case  to  measure  the 

charge  that  may  be  made  for  an3r  distance,  as  compared  with  a  longer 
distance,  all  of  these  limitations  must  be  taken  into  account,  and  they 
must  all  apply  to  the  case — not  three  or  four  of  them,  but  all  of  them. 
The  first,  fourth,  and  fifth  of  these  limitations  do  not  appear  to  call  for 
any  explanation,  but  the  meaning  of  the  second  and  third  may  need  some 
explanation. 

THE   LONG  AND   SHORT   HAUL   CLAUSE   TO   BE    ENFORCED   ACCORDING   TO 

"THE   CONDITIONS  THAT   GOVERN    RAILWAY   TRAFFIC   AND   TUT. 

CIRCUMSTANCES   UNDER    WHICH    IT    IS   TRANSPORTED." 

As  I  understand  them,  the  words  "circumstances  and  conditions" 
mean  the  conditions  that  govern  railway  traffic,  and  the  circumstances 
under  which  it  is  transported.  To  my  mind  these  words  are  full  of 
meaning.  They  comprehend  all  the  circumstances  and  conditions  that 
may  justify  differences  in  rates,  such  as  competition  with  other  railroads 
and  with  water  routes,  the  volume  and  character  of  business  at  different 
points,  the  difference  in  terminal  expenses,  and  the  cost  of  service  in  each 
case.  If  the  words  used  were  "  the  same  circumstances  and  conditions," 
ingenious  railway  gentlemen  would  be  able  to  show  that  the  circum- 
stances and  conditions  were  never  exactly  the  same  in  any  two  cases. 
And  they  might  also  be  able  to  show  that  they  were  not  "similar,"  if 
that  was  the  word  used.  But  the  words  "  substantially  similar"  impart 
enough  latitude  to  the  comparison  to  enable  the  courts  to  exercise  a  sound 
discretion  and  common  sense  in  passing  upon  cases  that  may  arise. 

So  far  as  any  one  railroad  company  is  concerned,  therefore,  the  sum 
which  it  may  charge  for  a  haul  from  one  end  of  its  railroad  to  the  other 
end  becomes  the  maximum  amount  it  can  charge  for  any  shorter  haul 


INTER -STATE    COMMERCE    LAW.  91 

over  that  road  in  the  same  direction  and  under  substantially  similar  cir- 
cumstances and  conditions  when  the  shorter  distance  is  included  within 
the  longer. 

THE   MEASURE   OF   THE   CHARGE   FOR  A   SHORTER   DISTANCE   IS  THE   SUM 
TO  BE   CHARGED   FOR   A  LONGER  DISTANCE. 

But  the  question  that  seems  to  trouble  those  who  object  to  the  section 
as  it  stands  is,  whether  the  maximum  thus  fixed  is  the  sum  which  a  rail- 
road company  charges  upon  shipments  originating  at  and  destined  to 
points  upon  its  own  road,  or  whether  the  maximum  is  the  sum  which  it 
accepts  as  its  share  of  a  through  rate  upon  shipments  passing  over  its 
road  which  originate  at  or  are  destined  to  points  upon  another  road.  It 
seems  clear  to  me  that  there  can  be  but  one  answer  to  that  question. 

In  the  first  place,  the  measure  of  the  charge  that  may  be  made  for  the 
shorter  distance  is  the  sum  that  is  charged  for  a  longer  distance  over  the 
same  line  and  under  substantially  similar  circumstances  and  conditions. 
The  rates  fixed  by  a  railroad  company  between  points  upon  its  own  road 
are  clearly  rates  upon  one  line,  or,  in  the  terms  of  the  bill,  the  "same 
line."  A  railroad  company  can  make  and  control  the  rates  upon  its  own 
road,  and  the  section  says  that  in  making  such  rates  the  short-haul  prin- 
ciple shall  be  observed.  A  railroad  company  can  not  control  rates  over 
the  road  of  another  company.  But  when  two  or  more  companies  unite 
in  making  joint  rates  over  their  respective  roads,  they  become  in  the  eye 
of  this  bill  one  line,  and  this  section  says  that  the  short-haul  principle 
must  be  observed  in  making  rates  over  that  line,  the  two  or  more  roads 
composing  it  being,  within  the  meaning  of  the  section,  the  same  line  so 
far  as  such  joint  rates  are  concerned.  The  word  railroad  is  used  through- 
out the  bill  and  the  word  line  is  used  only  in  this  section.  The  courts 
will  be  bound  to  assume  that  the  word  line  means  something  different 
from  the  word  railroad,  or  it  would  not  have  been  used  in  this  one  in- 
stance when  the  word  railroad  would  naturally  have  been  used  if  some- 
thing different  had  not  been  intended.  The  word  line  means  a  railroad 
or  a  combination  of  railroads.  It  means  a  route.  Section  7  of  the  bill 
requires  the  carriage  of  freights  to  be  "  treated  as  one  continuous  carriage 
from  the  place  of  shipment  to  the  place  of  destination,"  and  this  could 
not  be  done  in  the  case  of  shipments  over  connecting  roads  if  the  word 
used  in  this  section  was  "railroad"  instead  of  "line." 

Mr.  George. — Does  the  Senator  wish  to  be  understood  as  saying 
that  it  is  the  meaning  of  this  bill  that  the  long  and  short  haul  provision 
does  not  apply;  that  is,  that  the  circumstances  are  not  substantially  sim- 
ilar, where  one  of  the  points  is  a  competing  point  and  where  one  is  not? 

Mr.  Cullom. — I  mean  to  say  simply  this:  You  take  one  railroad, 
if  you  please,  between  the  city  of  Washington  and  the  city  of  New  York; 
that  railroad  makes  its  schedule  of  rates,  and  it  publishes,  under  this  bill, 
that  schedule  of  rates,  and  so  far  as  its  operation  on  its  own  road,  not  in 
connection  with  other  lines  or  roads,  but  on  its  own  road,  it  is  not  at  lib- 
erty to  charge  more  for  a  shorter  distance  on  that  road  between  here  and 
New  York  under  like  circumstances  and  conditions  than  it  charges  from 
here  to  New  York. 

Mr.  George. — But  the  point  is  this:  I  understood  the  Senator  to 
say — and  that  is  what  I  want  to  have  settled — that  if  one  point  from 


92         INTER -STATE  COMMERCE  LAW. 

which  the  shipment  is  made  is  a  competitive  point,  either  by  having  a 
competing  railroad  or  by  having  water  transportation,  and  the  other 
point  from  which  the  shipment  is  made  is  not  a  competitive  point,  then 
the  circumstances  are  not  substantially  similar. 

Mr.  Cullom.— I  do  say  the  facts  should  be  considered. 

Mr.  George. — Then  let  me  say  that,  if  I  believed  that  that  was  the 
meaning  of  the  bill  and  the  courts  would  assent  to  it,  I  would  vote  against 
it,  because  with  that  construction  upon  those  words  the  whole  provision 
in  the  bill  in  reference  to  the  long  and  short  haul  amounts  to  nothing. 

Mr.  Cullom.— If  it  does  not  amount  to  anything,  it  will  not  hurt 
anybody. 

Mr.  George. — I  do  not  want  to  hurt  anybody,  but  to  save  somebody 
by  a  substantial  provision  on  that  subject. 

Mr.  Cullom.  So  do  I;  but  I  do  not  want  to  humbug  anybody 
either.  The  Senate,  however,  by  a  deliberate  vote  placed  in  the  bill 
which  was  passed  by  the  Senate  during  last  session  these  words,  "under 
like  circumstances  and  conditions,"  and  did  it,  the  select  committee  not 
having  reported  those  words  to  the  Senate  in  the  original  bill. 

Mr.  George.  I  do  not  object  to  the  words.  I  object  to  the  inter- 
pretation which  you  put  upon  them.  I  do  not  believe  that  is  the  true  and 
legal  interpretation,  and  I  protest  that  this  bill  shall  go  through  here  with 
an  authoritative  exposition  or  interpretation  of  the  meaning  of  these 
words  given  them  b}r  the  Senator.  If  that  be  the  meaning  I  am 
against  it. 

Mr.  Cullom.  The  Senator  from  Mississippi  has  a  right  to  put  what- 
ever construction  on  those  words  he  chooses,  and  of  course  he  will  do  so; 
but  I  say,  not  as  the  chairman  of  the  committee,  but  simply  as  a  Sen- 
ator upon  this  floor,  that  those  words  were  put  in  there  by  this  Senate 
after  the  select  committee  had  failed  to  report  them,  and  they  were  put 
there  because  the  original  section  reported  by  the  committee  was  too  rigid 
and  it  was  feared  that  it  would  interfere  with  the  general  commerceof 
the  country,  and  when  they  were  put  there  they  were  put  there  to  mean 
something,  and  they  do  mean  something. 

They- mean  just  what  they  say,  that  you  shall  not  charge  more  for 
the  shorter  than  for  the  longer  distance  on  the  same  line  in  the  same  di- 
rection under  substantially  similar  circumstances  and  conditions,  and 
those  conditions  and  circumstances  may  be,  if  you  please,  the  fact  that 
one  place  is  a  competing  point  and  that  another  place  is  not,  the  fact  that 
one  place  furnishes  a  large  amount  of  business  and  the  way-station  does 
not  furnish  perhaps  more  than  a  car-load,  and  that  it  incurs  additional 
expense  and  all  that  sort  of  thing.  No  court,  no  commission,  and  no 
lawyer  can  afford  to  say  that  those  words  do  not  mean  anything  wfien 
Uiey  are  put  in  there. 

Mr.  George.  With  that  construction  of  it,  I  think  the  Senator 
'  gives  away  all  the  beneficial  part  of  the  bill. 

Mb.  Cullom.  The  Senator  does  no  such  thing.  The  fact  to-day  is 
—  and  I  want  the  Senator  from  Mississippi  to  hear  it 

Mr.  Gforge.     I  will  listen. 

Mr.  Cullom.  The  fact  to-day  is  that  there  is  an  utter  disregard  by 
the  railroads  of  the  country  of  the  circumstances  that  there  are  thousands 
and  tens  of  thousands  of  shipments  made  under  exactly  similar  circum- 


INTER -STATE    COMMERCE    LAW.  93 

stances  and  conditions  were  one  is  discriminated  against  and  another  is 
not,  where  one  place  is  broken  down  and  another  is  not,  where  one  man 
gets  rebate  and  another  does  not;  and  the  purpose  of  this  bill  is  to  pre- 
vent that  in  so  far  as  we  may  be  able  to  do  it  without  crippling  the  com- 
merce of  tha  country.  Does  not  the  Senator  think  there  is  anything 
in  it? 

Mr.  George.  1  think  there  is  a  good  deal  in  the  provision  against 
discrimination  and  the  provision  against  rebates,  but  I  think  that  by  the 
construction  put  upon  the  clause  as  to  the  long  and  short  haul  the  Sen- 
ator has  destroyed  the  benefit  of  that  provision. 

Mr.  Cullom.  The  joint  through  rates  which  are  made  by  two  or 
more  railroad  companies,  between  points  upon  their  respective  roads,  are 
made  over  an  entirely  different  and  distinct  line  from  that  over  which  any 
one  of  the  companies  individually  makes  rates.  And  they  are  also  made 
under  different  "  circumstances  and  conditions"  from  those  which  gov 
ern  and  determine  rates  over  a  single  railroad. 

The  two  transactions  are  separate  and  distinct,  neither  being  neces- 
sarily governed  by  the  other.  Furthermore,  the  making  of  joint  through 
rates  is  specifically  recognized  by  the  bill  in  the  section  requiring  pub- 
licity of  rates,  and*  nowhere  in  the  bill  can  anything  be  found  in  relation 
to  the  division  of  a  joint  rate  by  connecting  roads.  I  am  satisfied,  there- 
fore, that  the  only  construction  that  is  warranted  by  the  language  of  the 
section  is  the  one  I  have  gived  it,  and  that,  instead  of  requiring  rates  to 
be  measured  by  the  percentage  of  a  through  rate  which  a  road  accepts, 
or  of  requiring  through  rates  over  connecting  roads  to  be  an  aggregation 
of  the  local  rates  over  each  road,  as  some  have  claimed,  the  section  as  it 
stands  simply  requires  that  each  railroad  company  shall  observe  the  short- 
haul  principle  as  to  its  own  rates,  and  that  the  same  principle  shall  also 
be  observed  by  a  combination  of  railroads  as  to  the  joint  through  rates 
between  points  upon  their  respective  roads  agreed  upon  by  such  a  combi- 
nation. 

I  have  received  a  copy  of  the  New  York  Times  of  the  5th  instant, 
containing  a  long  argument  against  this  section  by  Mr.  George  R.  Blanch- 
ard,  commissioner  of  the  Central  Traffic  Association.  Mr.  Blanchard  is 
a  very  able  man,  and  has  a  peculiar  faculty  for  discovering  practical 
difficulties  that  may  arise  under  this  bill.  If  his  questions  can  be  an- 
swered satisfactorily,  as  I  think  they  can  be,  I  feel  sure  that  the  bill  can 
stand  the  test  of  practical  operation  reasonably  well.  In  this  letter  Mr. 
Blanchard  addresses  some  questions  to  me,  which  I  will  endeavor  to 
answer  in  order.  In  discussing  the  meaning  of  the  short-haul  section  Mr. 
Blanchard  says  : 

Traffic  is  received  at  Fort  Wayne  : 

i.  From  the  Wabash  Railway  coming  from  Kansas  City.  This  allows  the  lowest 
rate  east  of  Fort  Wayne.  m 

2.  From  the  nearer  connecting  Grand  Rapids  road.  This  allows  more  rate  east  of 
Fort  Wayne. 

3.  From  resident  forwarders.  This  allows  the  highest  rate  east  of  Fort  Wayne.  It  is 
a  frequent  happening  that  there  comes  to  Fort  Wayne  on  the  same  day  one  car  from 
each  of  these  sources,  none  of  them  being  handled  by  the  railways,  (because  the  town 
grain  comes  from  an  elevator),  and  that  the  three  cars  go  in  the  same  train  from  Fort 
Wayne  to  the  same  consignee  at  New  York,  but  at  the  said  three  different  rates.  It  is 
therefore  all  transported  out  of  Fort  Wayne  under  substantially  like  conditions.  Will 
Senator  Cullom  kindly  answer  the  following  : 


94  INTER -STATE    COMMERCE    LAW. 

i.     Would  the  transportation  circumstances  and  conditions  be  substantially  the  same? 

2.  Is  or  is  not  the  same  rate  required  from  Fort  Wayne  on  the  three  cars,  and  if 
not,  what  difference  may  prevail? 

3.  Does  this  refer  to  commercial  circumstances  and  conditions  by  which  each  point  of 
origin  is  to  be  considered  as  changing  them  ? 

4.  His  original  bill  defined  this  looseness  by  saying  "from  the  same  original  points  of 
departure,  or  to  the  same  point  of  arrival."     How  is  it  to  be  read  now  ? 

My  answer  to  the  first  question  is  that,  in  the  case  stated  by  Mr. 
Blanchard,  the  transportation  circumstances  and  conditions  would  not 
be  the  same  as  to  the  three  cars  in  question,  because  one  shipment  origi- 
nated at  Kansas  City,  another  on  the  Grand  Rapids  road,  and  another  at 
Fort  Wayne. 

The  second  question  is  :  "  Is  or  is  not  the  same  rate  required  from 
Fort  Wayne  on  the  three  cars  ;  and  if  not,  what  difference  may  pre- 
vail ?  " 

In  answer,  I  say  that  the  same  rate  or  charge  is  not,  in  my  opinion, 
necessarily  required  from  Fort  Wayne  on  each  of  the  three  cars,  because 
they  do  not  pass  "  over  the  same  line"  from  point  of  shipment  to  place 
of  destination  within  the  meaning  of  the  bill.  The  line  from  Kansas 
City  to  New  York  must  observe  the  short-haul  rule,  and  must  not  charge 
more  from  Fort  Wayne  than  from  the  first  point  on  that  line  west  of 
Fort  Wayne  to  which  that  particular  combination  of  carriers  makes  joint 
through  rates.  The  combination  of  carriers  making  joint  rates  from 
points  on  the  Grand  Rapids  road  to  New  York  must  observe  the  same 
rule.  The  shipment  originating  at  Fort  Wayne  would  be  governed  by 
charge  made  from  the  next  point  west  of  Fort  Wayne  on  the  road  be- 
tween Fort  Wayne  and  New  York.  The  same  rule  must  be  observed  in 
all  these  transactions  as  to  each  separate  line,  but  the  differences  between 
the  amounts  actually  received  for  the  haul  from  Fort  Wayne  to  Xew 
York  in  each  case  must  depend  upon  the  circumstances  in  each  case. 

I  think  Mr.  Blanchard's  third  and  fourth  questions  are  sufficiently 
answered  by  what  I  have  already  said.  In  the  same  letter  he  propounds 
several  questions  to  the  Senator  from  Iowa  [Mr.  Allison]  which  I  de- 
sire to  notice.  He  quotes  the  following  statement  which  the  Senator  is 
reported  to  have  made  : 

When  the  Boston  and  Albany,  New  York  Central,  and  Lake  Shore  combine  and  fix  a 
through  rate  from  Boston  to  Chicago,  they  can  not  charge  more  between  Boston  and  Buffalo 
than  the  aggregate  charge.  That  gives  a  wide  latitude.  It  allows  a  charge  of  as  much 
for  50  miles  as  for  500,  though  no  more. 

So  far  as  the  fourth  section  is  concerned,  the  Senator  from  Iowa  is 
reported  to  have  said  it. 

Mr.  Blanchard  then  asks:  "How  can  the  rate  from  Boston  to  Chicago 
be  charged  to  Buffalo?" 

My  answer  is  that,  if  the  combination  of  carriers  named  by  the  Sen- 
ator agrees  upon  and  publishes  a  schedule  of  joint  rates  between  Boston 
Tmd  Chicago,  the  charge  made  to  Buffalo  must  not  exceed  the  sum 
charged  to  Chicago,  but  it  may  be  the  same,  so  far  as  this  short-haul  sec- 
tion is  concerned.  The  prohibition  made  by  this  section  is  simply  against 
charging  more  in  the  aggregate  to  Buffalo  than  to  any  point  beyond 
Buffalo  on  the  line  composed  of  the  three  roads  named.  The  charge  to 
Buffalo  must  not  exceed  the  amount  charged  to  Chicago;  but  that  is  not 
all.  It  must  not  exceed  the  charge  to  any  point  between  Buffalo  and  Chi- 


INTER -STATE    COMMERCE    LAW.  95 

cago  to  which  the  combination  composed  of  these  three  carriers  makes 
joint  rates. 

If  the  charge  to  any  of  the  intermediate  points  is  less  than  the  charge 
to  Chicago,  such  smaller  sum  becomes  the  maximum  amount  that  can  be 
charged  to  Buffalo  instead  of  the  Chicago  charge.  This  is  as  far  as  the 
short-haul  section  affects  the  charge  to  Buffalo.  When  a  question  is 
raised  as  to  the  right  of  carriers  to  charge  as  much  to  Buffalo  as  to  Chi- 
cago or  the  next  point  west  of  Buffalo,  that  must  be  determined  by  the 
commission  and  the  courts  under  the  requirements  of  the  bill  that  all  rates 
must  be  reasonable  and  that  no  unreasonable  preference  must  be  given  to 
any  particular  locality. 

Mr.  Blanchard  s  second  question  is:  "Why  is  it  the  rate  to  Chicago 
rather  than  to  Cleveland  or  Omaha  which  may  be  charged  from  Boston 
to  Buffalo,  and  why  is  it  any  of  them?" 

It  is  to  be  presumed  that  under  the  requirements  of  the  bill  such 
joint  through  rates  as  those  under  consideration  would  be  established  and 
made  public  by  the  carriers.  The  illustration  said  to  have  been  given  by 
the  Senator  from  Iowa  referred  to  shipments  over  a  line  from  Boston  to 
Chicago  composed  of  three  railroads.  The  charge  to  Omaha  does  not 
govern  the  rates  made  on  that  particular  line,  because  Omaha  is  not  on 
"the  same  line." 

The  charge  made  to  Buffalo  must  not  exceed  the  charge  to  Chicago, 
nor  to  Toledo,  nor  to  Cleveland,  nor  to  Erie,  nor  to  the  first  point  west  of 
Buffalo  on  that  line  to  which  the  three  carriers  named  make  joint  rates. 
In  this  case  the  first  requirement  of  the  short-haul  section  is  that  the 
charge  to  Buffalo  shall  not  exceed  the  charge  to  Chicago,  which  would  be 
the  largest  amount  that  could  be  charged.  But  the  maximum  would  be 
decreased  as  the  charges  to  points  between  Buffalo  and  Chicago  de- 
creased, so  that  the  smallest  sum  charged  to  any  point  beyond  Buffalo 
would  really  become  the  maximum  amount  that  could  be  charged  to 
Buffalo. 

Again,  Mr.  Blanchard  asks: 

If  they  can  charge  as  much  from  Boston  to  Buff  Jo  as  three  lines  combined  may 
charge  from  the  same  or  further  points  to  Chicago,  why  can  not  the  charge  bi  as  much  as 
six  lines  combined  from  Boston  to  San  Francisco? 

There  is  nothing  in  the  short-haul  section  standing  by  itself  that 
would  prevent  the  same  charge  being  made  from  Boston  to  Buffalo  that 
is  made  from  Boston  to  San  Francisco,  if  we  can  assume  that  no  smaller 
charge  is  made  to  any  point  between  Buffalo  and  San  Francisco.  When 
the  six  carriers  combine  to  make  joint  rates  between  Boston  and  San 
Francisco  they  become  a  different  line,  and  not' the  line  that  we  were 
talking  about  or  that  the  Senator  from  Iowa  is  charged  with  having 
talked~about,  from  Boston  to  Chicago.  The  charge  this  different  com- 
bination could  make  to  Buffalo  would  be  limited  first  by  its  charge  to 
San  Francisco,  then  by  its  charge  to  Ogden  if  that  was  less,  then  by  its 
charge  to  Omaha  if  that  was  less,  then  by  its  charge  to  Chicago  if  that 
was  less,  and  finally  by  the  lowest  charge  made  to  any  point  west  of 
Buffalo  to  which  this  combination  of  six  carriers  made  and  published 
joint  rates. 


96  INTER -STATE    COMMERCE    LAW. 

DEBATE   ON   MR.  CULLOM'S  REMARKS. 

Mr.  Dawes. — I  should  like  to  ask  the  Senator  from  Illinois  for  an 
explanation  of  the  effect  of  the  bill.  Suppose  the  Boston  and  Albany 
Railroad  takes  freight  at  Albany  for  Boston  from  different  lines  from  the 
West — freight  from  Chicago  on  one  line,  freight  from  Saint  Louis  on  an- 
other, freight  from  Cleveland  on  another,  and  freight  from  Kansas  City 
on  another — if  the  Boston  and  Albany  makes  a  different  charge  for  the 
freight  that  it  takes  off  from  one  of  these  lines  on  its  way  to  Boston  than 
it  does  from  any  other  line,  does  it  not  subject  itself  to  the  prosecution 
set  up  in  your  bill? 

Mr.  Cullom. — I  have  just  been  discussing  the  very  points  the  Sena- 
tor raises. 

Mr.  Dawes. — Probably  I  was  out  of  the  Senate  chamber. 

Mr.  Cullom. — However,  I  have  no  objection  to  the  Senator  asking 
the  question,  because  I  want  to  be  perfectly  fair  about  this  matter.  I 
have  undertaken  to  show  that  a  line  of  railroad  may  be  one  line  doing- 
business  by  itself,  having  its  tariff  of  rates  for  its  own  use,  and  it  can 
control  them,  and  that  one  road  shall  not  be  at  liberty  to  charge  more  for 
the  shorter  than  for  the  longer  distance  on  the  same  line,  in  the  same 
direction,  and  under  the  same  circumstances,  etc.  Now,  you  can  make 
a  line  of  a  dozen  roads,  for  instance,  as  I  said,  from  San  Francisco  to 
Boston,  and  the  same  rule  applies  as  to  that  line,  that  it  shall  not  be 
allowed  to  charge  more  for  the  shorter  than  for  the  longer  distance,  and 
so  on,  under  similar  circumstances.  Suppose  there  are  four  roads  com- 
ing into  Buffalo.     I  believe  that  is  the  place  the  Senator  named? 

Mr.  Dawes. — No,  Albany.  I  will  explain  to  the  Senator  that 
Albany  is  where  the  Boston  and  Albany  road  begins.  It  is  an  indepen- 
dent line  from  there  to  Boston,  and  being  in  two  States  it  is  subject  to  all 
the  penalties  of  your  bill. 

Mr.  Cullom. — I  understand.  Suppose  there  are  four  roads  coming 
to  Albany,  and  each  one  of  them  does  business  with  the  Albany  and  Bos- 
ton road.  At  the  other  end  of  its  line,  if  37ou  please,  each  one  of  them 
has  its  arrangements  of  through  rates,  by  which,  from  Kansas  City,  the 
Wabash,  for  instance,  carries  freight  to  Albany,  and  on  to  Boston  on  that 
line;  another  road  from  Chicago  carries  freight  from  Chicago  to  Albany 
and  on  to  Boston  on  that  line;  another  one  from  Detroit  carries  freight 
to  Albany  and  on  to  Boston  on  that  line. 

Each  one  of  these  different  roads  makes  its  own  combination,  its 
own  arrangements  with  the  Boston  and  Albany  by  which  grain  or 
other  products  are  transported  over  its  line  from  Albany  to  Boston;  and 
the  charge  that  the  Albany  and  Boston  road  makes,  or  the  agreement 
that  it  makes,  if  you  please,  with  these  different,  separate  lines  has 
nothing  to  do  with  what  it  charges  one  or  the  other  of  them,  and  it  has 
nothing  to  do  with  its  own  local  rates  from  Albany  to  Boston. 

Mr.  Hoar. — Except  under  the  clause  as  to  unjust  discrimination. 

Mr.  Cullom. — Except  under  the  clause  relative  to  unjust  discrim- 
ination. As  I  said  before,  the  Albany  and  Boston  road  can  have  an 
arrangement  with  the  Wabash  by  which  grain  is  brought  from  Kansas 
City  to  Boston  over  its  line  at  just  whatever  rate  the  Wabash  line  can 
agree  upon,  and  so  with  each  of  the  others. 

Mr.  Dawes. — And  they  can  charge  a  different  rate? 


INTER -STATE    COMMERCE    LAW.  97 

Mr.  Cullom. — They  can  cany  the  freight  as  they  may  agree  to  carry 
it,  and  whatever  their  agreement  may  be,  it  does  not  affect  the  freight 
that  goes  from  Albany  to  Boston  on  that  line,  its  own  line,  according  to 
its  own  published  rates  of  freight. 

Mr.  Dawes. — Suppose  it  be  a  different  rate  from  that  for  which  it 
takes  up  freight  at  Albany  and  carries  it  to  Boston? 

Mr.  Cullom. — It  does  not  make  the  slightest  difference  in  the  world; 
it  has  nothing  to  do  with  it.  One  is  a  line  of  railroad  by  itself,  the  other 
is  a  line  of  railroad  in  conjunction  with  one,  two,  or  five  others,  if  you 
please,  and  the  one  rate  does  not  control  the  others.  In  other  words,  as 
I  have  said  over  and  over  again,  tire  percentage  that  the  Boston  and  Al- 
bany road  gets  for  carrying  the  products  that  are  brought  from  the  far 
west  to  Boston  after  they  reach  Albany  has  nothing  to  do  with  regulating 
the  rates  from  Albany  to  Boston  over  that  road. 

Mr.  Dawes. — Do  you  find  that  in  the  letter  of  your  bill,  or  do  you 
think  that  ought  to  be  the  construction  of  it? 

Mr.  Cullom.— I  think  that  is  a  reasonable  construction  of  the  bill, 
and  I  have  no  question  myself  but  that  the  courts  and  the  commission 
would  construe  it  that  way.  The  letter  of  the  bill  will  sustain  that  con- 
struction of  it,  I  think. 

Mr.  Aldricii. — It  is  of  the  utmost  importance  that  we  as  well  as  the 
business  community  should  understand  the  construction  the  committee 
put  upon  this  bill.  I  wish  to  ask  the  Senator  from  Illinois  one  or  two 
questions  in  this  connection,  so  that  we  may  understand  fully  just  what 
the  committee  understand  to  be  the  meaning  of  this  section. 

As  I  understand  him,  if  a  combination  of  roads  agree  to  carry  freight 
from  San  Francisco  to  New  York  at  $1  a  hundred  pounds,  that  rate  is  the 
only  limitation  which  that  particular  transaction  makes  upon  any  inter- 
mediate rates  between  San  Francisco  and  New  York.  Do  I  understand 
that  to  be  the  Senator's  construction? 

Mr.  Cullom. — Ask  that  question  again. 
_  Mr.  Aldricii. — In  the  case  of  a  contract  for  the  transportation  of 
freight  from  San  Francisco  to  New  York  at  an  agreed  rate  of  $1  per  100 
pounds,  that  rate  of  $1  per  100  pounds  is  the  only  limitation  which  that 
transaction  fixes  upon  any  intermediate  transportation  or  upon  transport- 
ation between  any  intermediate  points  between  San  Francisco  and  New 
York? 

Mr.  Harris. — Will  the  Senator  from  Illinois  allow  me  to  answer  that 
particular  question  of  the  Senator  from  Rhode  Island? 

Mr.  Aldrich.— I  was  only  trying  to  find  out  whether  that  was 
what  the  Senator  from  Illinois  had  stated.  I  understood  him  to  state 
that, 

Mr.  Harris. — The  statement  of  the  Senator  from  Illinois  on  that 
point,  as  I  understood  him — and  I  think  I  understood  him  clearly  and 
correctly — was  this:  Here  are  four  distinct  and  independent  lines  of 
railroad  between  New  York  and  San  Francisco;  first,  the  Pennsylvania 

Mr.  Aldricii. — I  am  talking  about  the  same  line.  Take  one  of  the 
lines. 

Mr.  Harris. — There  is  a  line  composed  of  four  distinct  and  inde- 
pendent lines. 

Mr.  Aldrich. — Take  one  of  them. 


98  INTER -STATE    COMMERCE    LAW. 

Mr,  Harris. — It  becomes  one  line  by  a  contract  and  agreement  be- 
tween these  four  separate,  distinct,  and  independent  companies. 

Now,  to  answer  the  question  and  to  illustrate,  assume  that  by  con- 
tract upon  the  long  line  from  New  York  to  San  Francisco,  composed  of 
four  independent,  distinct  lines  becoming  one  by  contract  and  agreement 
with  the  owners  of  these  four  lines  for  specific  purposes  and  a  specific 
character  of  freight,  that  line  agrees  to  haul  a  car-load  of  grain  or  other 
freight  from  San  Francisco  to  New  York,  say,  for  $100. 

Mr.  x\ldrich. — One  dollar  per  hundred  pounds,  I  said. 

Mr.  Harris. — Very  well ;  but  one  hundred  dollars  illustrates  the 
principle  just  as  well,  taking  the  freight  by  the  car-load  instead  of  a 
hundred  pounds.  Now,  $100  is  the  through  rate  from  San  Francisco  to 
New  York.  By  agreement  each  of  those  four  companies  agrees  to  ac- 
cept $25  apiece,  making  the  hundred.  If  they  agree  only  for  through 
freights,  if  this  agreement  extends  only  for  through  freights  from  San 
Francisco  to  New  York  the  hundred  dollars  a  car-load  would  be  the 
maximum  long-haul  charge,  and  it  would  be  the  maximum  of  any  short- 
haul  that  passes  over  two  or  more  of  those  roads.  But  suppose  by  con- 
tract the  parties  agree  to  carry  from  San  Francisco  to  New  York  at  $100 
a  car,  from  Ogden  to  New  York  at  $75  a  car,  from  Omaha  to  New  York 
at  $50  a  car,  then  the  rule  would  be  from  Ogden  to  New  York,  that  is 
from  any  point  east  of  Ogden  to  New  York,  they  could  not  charge 
more  than  $75.  The  rule  would  be  from  Omaha  to  New  York,  from 
any  point  east  of  Omaha  to  New  York,  they  could  not  charge  more 
than  $50. 

Mr.  Aldrich. — What  I  want  to  get  at  is  the  understanding  of 
the  committee.  Could  this  same  line  charge  $99  from  Ogden,  and 
from  Omaha,  and  from  Chicago,  and  from  Cleveland,  and  from  Buffalo 
to  New  York  ?  So  far  as  the  limitations  of  the  section  are  concerned, 
would  they  be  allowed  to  charge  $99  per  car-load,  say,  from  Buffalo  to 
New  York  ? 

Mr.  Spooxer. — They  must  charge  a  reasonable  rate. 

Mr.  Aldrich. — As  I  understand  the  fourth  section,  so  far  as  dis- 
tance is  concerned,  it  undertakes  to  fix  what  is  a  reasonable  rate.  That 
is  another  part  of  the  bill  ;  but  this  section  of  the  bill,  if  I  understand 
it  at  all,  undertakes  to  construe  the  difference  of  distance  into  what  is 
reasonable. 

Mr.  Cullou. — It  does  not  do  any  such  thing. 

Mr.  Harris. — If  the  Senator  will  allow  me  to  suggest  it  to  him, 
in  as  explicit  terms  as  language  will  permit,  each  common  carrier  is 
not  only  authorized  but  required  to  classify  and  fix  the  rates  upon  the 
road. 

Mr.  Aldrich. — That  is  another  section.  I  am  speaking  now  about 
the  provision  of  the  fourth  section  and  only  the  fourth  section  of  the 
bill. 

Mr.  Harris.  I  answer  the  declaration  of  the  Senator  that  this  bill 
wrould  have  to  determine  what  was  a  reasonable  rate. 

Mr.  Aldrich.  Is  there  anything  that  does  it,  I  ask,  so  far  as  this 
section  of  the  bill  is  concerned?  The  Senator  from  Illinois  does  not 
understand  it  that  way ;  and  I  resume,  if  the  Senator  pleases,  and  ask  him 
to  answer  my  question. 


INTER -STATE    COMMERCE    LAW.  99 

Mr.  Harris.     I  yield  to  the  Senator  from  Illinois. 

Mr.  Aldrich.  I  mean  the  Senator  from  Tennessee.  My  question 
is  whether  under  the  provision  of  this  section  there  is  anything  which 
would  prevent  this  same  line  from  charging  $99  a  car  (certainly  it  can 
not  charge  as  much  as  $100)  from  each  one  of  the  points  to  which  I  have 
alluded." 

Mr.  Harris.  If  I  was  understood,  I  answered  that  question  a  few 
moments  since,  but  I  will  repeat  my  answer,  as  I  see  that  I,  perhaps,  was 
not  understood.  This  long  line  becomes  a  distinctive  carrier  by  contract, 
composed  of  four  distinct  and  independent  railroads.  If  the  contract 
provides  for  the  carrying  of  freight  simply  from  San  Francisco  to  New 
York  and  the  contract  stops  there,  it  is  a  line  for  a  specific  purpose  and  for 
no  other  purpose. 

Mr,  Aldrich.     In  other  words,  it  is  a  contract. 

Mr.  Harris.  And  if  that  be  true,  then  there  is  no  reason  to  be 
found  in  this  bill  why  they  may  not  charge  from  any  intermediate  point 
up  to  the  maximum,  except  that  the  charge  must  be  reasonable. 

Mr.  Aldrich.  As  I  understand  the  Senator  now,  he  says  that  that 
understanding  and  agreement  constitutes  a  line  of  itself  for  through  busi- 
ness from  San  Francisco  to  New  York. 

Mr.  Harris.     So  it  does. 

Mr.  Aldrich.  And  that  an  agreement  from  Sacramento  to  New 
York  would  constitute  a  new  line  with  the  right  to  make  a  new  contract 
not  dependent  upon  the  other.  Is  that  truer  I  ask  that  question  and  I 
should  like  an  answer. 

Mr.  Harris.  If  the  contract  fixes  a  different  rate  and  a  lower 
rate 

Mr.  Aldrich.  It  is  another  line.  Does  it  constitute  another  line 
within  the  meaning  of  the  bill  which  entitles  them  to  make  another  and 
a  different  contract? 

Mr.  Harris.  Upon  the  contrary,  I  think  it  is  the  same  line  created 
by  contract  and  composed  of  four  distinct  lines. 

Mr,  Hoar.  Suppose  three  of  those  four  make  a  contract  with  their 
three  roads,  the  Senator  from  Rhode  Island  wants  to  know  whether  that 
makes  a  different  line,  one  line  of  the  four  roads  and  another  of  the 
three? 

Mr.  Harris.  I  can  see  no  reason  why  three  of  the  lines  may  not 
transact  among  themselves,  for 

Mr.  Aldrich.  I  understood  the  Senator  from  Tennessee  to  say  dis- 
tinctly that  a  contract  from  San  Francisco  for  through  freight  constituted 
that  line  a  line  only  for  that  purpose,  and  that  it  did  not  put  any  limita- 
tion at  all  upon  other  contracts  from  intermediate  points.  What  I  want 
to  find  out  is  whether  at  Sacramento  they  would  have  a  right  to  make  a 
new  contract,  ignoring  the  provisions  and  limitations  of  the  original  con- 
tract from  San  Francisco. 

Mr.  Hoar.     And  make  a  new  line  and  charge  more? 

Mr.  Aldrich.  Yes;  can  they  make  a  new  line  of  three?  That  is 
the  point  I  am  coming  at  exactly.  Here  are  between  New  York  and  San 
Francisco  ten  different  railroad  companies,  who  have  joined  in  a  con- 
tract which  constitutes  according  to  the  Senator  from  Illinois  and  the 
Senator  from  Tennessee,  a  distinct,  separate  line  from  San  Francisco  to 


100  INTER -STATE    COMMERCE    LAW. 

New  York.  Now  is  it  a  new  line  when  nine  of  those  join  in  that  con- 
tract, and  are  they  exempted  from  the  provisions  and  limitations  which 
apply  to  the  line  of  ten  companies:  and  if  eight,  if  seven,  if  six,  can 
each  one  of  these  companies  make  a  new  contract  with  new  rates  which 
have  no  limitations  or  relations  to  the  nine  or  ten?  That  is  what  the  Sen- 
ator from  Illinois  said  —  that  then  you  can  fix  your  rates  entirely  separate 
and  apart  from  the  line.  If  these  are  separate  and  distinct  lines,  nine 
can  charge  more  than  ten;  eight  can  charge  more  than  ten;  seven  can 
charge  more  than  ten,  until  you  get  down  to  two,  and  they  can  charge 
more  than  ten,  and  then  you  have  only  one  line. 

That  is  the  point  I  was  coming  at  exactly — whether  each  one  of 
these  various  companies  forming  a  line  in  itself  was  affected  at  all  by  the 
limitations  which  were  fixed  by  a  large  combination  that  included  the 
whole.  I  understood  the  Senator  from  Illinois  to  say  distinctly  they  were 
not  so  bound,  and  that  there  was  no  limitation  by  this  bill  in  the  through 
rates  upon  smaller  lines.  For  instance,  if  four  roads  between  Chicago 
and  New  York  charge  one  sum,  it  would  not  prevent  three  roads  from 
Buffalo  from  charging  twice  as  much,  or  three  roads  between  Cleveland 
and  New  York  from  charging  three  times  as  much.  It  is  not  a  question 
of  business.  I  am  trying  to  get  at  what  construction  the  committee 
places  on  this  section. 

Mr.  Harris.  You  mean  three  different  roads  from  those  I  have 
mentioned  as  constituting  the  long  line  from  San  Francisco? 

Mr.  Aldricii.  No,  I  mean  three  of  the  same  roads  which  made  up 
the  four  in  the  original  line. 

Mr.  Harris.  Three  of  the  same  roads  would  not  reach  the  same 
point;  they  would  not  reach  San  Francisco. 

Mb.  Aldricii.     They  would  reach  an  intermediate  point. 

Mr.  Hoar.     They  are  links  in  the  same  chain. 

Mr.  Aldricii.  They  are  three  links  of  the  same  long  chain  which 
you  have  drawn  out. 

Mr.  Harris.  The  case  I  put  originally,  it  seems  to  me,  clearly  and 
distinctly  answers  the  Senator's  question.  If  this  long  line,  being  con- 
stituted with  four  separate,  distinct,  and  independent  lines,  has  con- 
tracted for  through  freights  and  for  through  freights  only,  I  do  not  see 
that  their  contracts  or  the  existence  of  that  line  would  affect  any  other 
than  the  through  shipments;  but  if  in  their  contract  constituting  that 
long  line  composed  of  the  four  distinct  lines  they  fix  one  rate  from  San 
Francisco  to  New  York,  another  from  Ogden  to  New  York,  another 
from  Omaha  to  New  York,  or  any  of  the  intermediate  points,  including 
more  than  one  of  the  lines  to  carry  the  freights,  then  the  short-haul  pro- 
vision would  apply  to  the  maximum  charge  fixed  by  that  agreement, 
fixed  by  that  line  upon  which  the  freights  were  to  be  transported. 

Mr.  Aldricii.  That  is  the  question  which  I  meant  to  ask  the 
Senator  from  Tennessee  in  the  first  instance,  and  I  think  he  has  answered 
it  now.  It  was,  that  if  this  constitutes  one  through  line  from  San  Fran- 
cisco to  New  York,  as  I  now  understand  him,  they  could  fix  a  rate 
of  $100  a  car  from  San  Francisco,  and  §99  a  car  from  all  the  intermedi- 
ate points  under  the  provisions  of  this  section  of  the  bill. 

Mr.  Camden.     There  is  no  doubt  about  that. 

Mr.  Aldricii.    Is  that  what  the  Senator  from  Tennessee  meant  to  say  ? 


INTER -STATE    COMMERCE    LAW.  101 

Mr.  Harris.  If  they  provide  for  but  one  rate,  and  that  an  entire 
through  rate,  then  the  maximum  charge  of  the  through  rate  would  be 
$100,  and,  so  far  as  the  fourth  section  is  concerned,  the  maximum  charge 
for  the  short  haul  could  not  exceed  a  hundred  dollars. 

Mr.  Aldrich. — It  could  come  anywhere  within  the  whole  charge? 

Mr.  Harris.  — Not  exactly  anywhere  within  the »  whofe-  charge. 
That  is  to  say,  whenever  you  come  to  freights  that  -begm  acid  entr  on 
one  line  of  road,  that  is,  on  one  interstate  railroad,  then  the  rates  fixed 
by  that  railroad  apply,  and  not  the  rates  fixed  by  contracts  with  any 
other  roads. 

Mr.  Stanford  obtained  the  floor. 

Mr.  Hoar. — I  should  like,  with  the  leave  of  the  Senator  from  Cali- 
fornia, to  ask  one  question  of  the  Senator  from  Tennessee.  That  is, 
whether  he  agrees  with  the  Senator  from  Illinois  that  the  mere  destina- 
tion, that  is  freight  being  carried  to  a  foreign  point  or  to  a  domestic 
point,  the  case  I  put  to  him,  constitutes  a  difference  of  circumstances  and 
conditions  under  this  bill? 

M r.  Harris. — In  answer  to  the  suggestion  of  the  Senator  from  Mas- 
sachusetts, 1  desire  to  say  to  him  that  as  a  legislator  I  do  not  think  it  con- 
cerns me  to  determine  the  conclusion  of  fact  as  to  what  would  constitute 
similar  conditions  and  circumstances.  That  is  a  fact  to  be  ascertained  by 
the  commission,  if  appealed  to,  or  decided  by  the  common  carrier  and  to 
be  complained  of  if  he  decides  it  incorrectly;  and  the  commission  will 
then  investigate  the  question  and  determine  whether  the  conditions  and 
circumstances  are  similar  in  a  given  case  put. 

Mr.  Hoar. — But  does  the  Senator  mean  to  say  that  being  able  to 
maintain  a  great  foreign  commerce,  millions  upon  millions,  it  ought  to  be 
dependent  upon  the  opinion  of  the  five  commissioners  and  not  to  be 
fixed  by  the  law-making  power,  so  that  in  voting  for  this  measure  he  has 
not  an  opinion  as  to  whether  that  thing  should  continue? 

Mr.  Harris. — I  mean  to  say  that  whatever  effect  may  be  wrought 
upon  any  given  commercial  point  by  the  establishment  of  a  correct  rule 
of  transportation,  the  correctness  and  fairness  and  justice  of  the  rule 
should  determine  it,  and  not  the  interest  of  the  locality  in  question;  and 
I  mean  to  say  in  addition  that  it  is  very  difficult,  in  my  opinion,  to  estab- 
lish the  justice  of  a  given  carrier  charging  more  for  carrying  a  load  of 
the  same  character  of  freight,  and  at  the  same  time,  and  under  substan- 
tial^ the  same  circumstances,  over  one-half  of  its  road  than  it  charges  for 
carrying  the  same  over  the  whole  length  of  its  line.  If  the  adoption  and 
maintenance  of  that  rule  shall  work  prejudice  to  the  trade  of  any  given 
locality,  it  is  the  misfortune  of  that  locality,  and  it  ought  to  be  made  the 
misfortune  of  the  locality  and  not  made  the  misfortune  of  all  the  people 
who  chance  to  live  at  non-competitive  points  along  the  line  of  the  road. 

Mr.  Hoar.— I  can  not  see  any  misfortune  to  ai^body  else.  It  does 
not  hurt  the  other  people  any. 

Mr.  Aldrich. — Will  the  Senator  from  California  let  me  ask  the 
Senator  from  Tennessee  just  one  more  question? 

Mr,  Stanford. — Certainty. 

Mr.  Aldrich. — I  desire  to  know  whether  he  agrees  with  the  Senator 
from  Illinois  that  where  in  case  the  short  haul  is  to  a  non-competitive 
point  and  the  longer  haul  to  a  competitive  point,  that  constitutes  such  a 


102  INTER -STATE    COMMERCE    LAW. 

dissimilarity  of  circumstances  and  conditions  as  would  allow  the  railroad 
company  to  charge  a  greater  sum  for  the  shorter  haul? 

Mr.  .Cui/lom; — The  Senator  from  Rhode  Island  will  pardon  me. 
•The  Senator  f  mm  Illinois  made  no  such  declaration. 

Mr.  Aldrich.- -I  certainly  understood  him  to  make  exactly  that 
'declaration  in  ancwer'to  the  Senator  from  Mississippi  [Mr,  George]. 
••'  ;     Mr.  Cullom'. —Will  the  Senator  allow  me  to  interrupt  him? 

Mr.  ALDRicn.— Of  course. 

Mr.  Cullom. — The  Senator  from  Illinois  said  that  the  question  of 
conditions  and  circumstances  necessarily  would  be  taken  into  considera- 
tion as  between  the  competitive  and  the  non-competitive  points.  The  Sen- 
ator from  Illinois  gave  no  opinion  upon  the  question  as  to  what  the  de- 
cision should  decide, 

Mr.  Aldrich. — I  understood  him  to  make  the  statement  I  attributed 
to  him. 

Mr.  Cullom.— While  I  am  upon  the  floor  I  wish  to  say  another 
thing.  The  Senator  from  Massachusetts  objects  to  the  construction  of 
this  subject  being  left  in  any  degree  to  a  commission. 

Mr.  Hoar. — No;  but  that  part  of  it, 

Mr.  Cullom. — I  refer  to  the  question  whether  the  foreign  commerce 
of  the  country  should  be  interfered  with  or  not.  All  I  desire  to  say  is 
that  the  best  we  can  do  is  to  pass  the  best  bill  we  can,  and  it  is  for  the 
commission  and  the  railroads  and  the  courts  to  construe  it  afterward. 
We  are  compelled  to  leave  it  to  the  common  carriers  and  then  to  the  com- 
mission, if  one  is  created,  and  at  last  to  the  courts  to  determine  what 
the  proper  construction  of  the  law  that  we  shall  pass  may  be. 

Mr.  Aldrich. — As  the  Senator  from  Illinois  says^  that  he  did  not 
make  that  statement,  I  now  ask  him  what  his  opinion  is  upon  that  ques- 
tion, if  he  has  any,  and  I  should  like  also  to  get  the  opinion  of  his  col- 
leagues on  the  committee. 

Mr.  Cullom. — 1  will  simply  say  in  answer  to  the  Senator  from 
Rhode  Island  that  he  seems  to  be  exceedingly  anxious  to  in  some  way 
make  the  bill  which  is  before  the  Senate  offensive  to  the  people  of  this 
country,  but  I  repeat  that  any  court  or  any  commission  which  had  the 
construction  of  this  section  to  pass  upon  would  be  required  to  take  into 
account  the  language  used,  the  place,  the  circumstances,  and  all  together 
as  to  what  those  words  should  mean  in  determining  whether  a  competi- 
tive point  should  have  any  advantage  over  a  non-competitive  point. 

Mr.  Camden. — If  the  Senator  from  Rhode  Island  will  allow  me  I 
will  answer  his  question. 

Mr.  Aldrich. — I  desired  an  ex  cathedra  answer  from  the  committee 
who  made  this  report. 

Mr.  Harris. — If  the  Senator  wants  my  opinion  he  shall  have  ex- 
actly what  I  understand  it  to  mean. 

Mr.  Aldrich. — I  do. 

Mr.  Harris. — I  favored  the  short-haul  provision  from  the  beginning, 
and  did  so  for  this  reason:  As  a  general  rule  the  shipper  from  a  competi- 
tive point  has  a  measure  of  protection,  at  least,  by  the  competition  that 
exists  there. 

Mr.  Aldrich. — How  if  the  shippers  there  can  not  get  any  lower 
rates? 


INTER. STATE    COMMERCE    LAW.  103 

Mr.  Harris. — But  the  shipper  from  a  point  non-competitive,  where 
he  must  accept  the  terms  of  the  carrier  or  allow  his  produce  to  perish 
upon  his  hands,  is  the  shipper  whom  I  wanted  a  short-haul  law  to  pro- 
tect. 

Mr.  Camden. — That  is  the  very  object  of  the  provision. 

Mr.  Harris. — That  is  the  very  object  with  me,  at  least,  in  having 
insisted  from  the  moment  I  entered  the  interstate  commerce  committee, 
and  I  continue  up  to  this  moment  and  shall  continue  to  insist  upon  a 
short-haul  provision,  so  as  to  give  the  shipper  from  the  non-competitive 
point  some  protection  against  unreasonable  and  unjust  exactions;  and  for 
another  reason:  Take  Chicago,  for  instance,  as  a  competitive  point. 
When  rate  wars  may  rage  and  drive  through  freights  down  to  an  unreas- 
onable point,  if  the  competing  carriers  there  know  that,  however  low 
they  may  put  their  rates  from  Chicago  to  New  York,  they  can  not  charge 
an  aggregate  sum  greater  for  any  shorter  haul  between  Chicago  and  New 
York,  it  will  do  more  to  restrain  and  to  prevent  rate  wars  than  all  your 
pooling  contracts  have  ever  done  or  will  ever  do. 

Mr.  Aldrich. — Does  the  Senator  from  Tennessee  expect  that  those 
results  will  ever  accrue  from  the  passage  of  this  bill  ? 

Mr.  Harris. — The  protection  of  the  shipper  from  non-competitive 
points  ? 

Mr.  Aldrich. — Yes. 

Mr.  Harris. — I  not  only  expect,  but  I  am  confident  that  it  will 
.accrue  from  this  bill. 

Mr.  Aldrich. — I  have  received  an  answer,  so  far  as  the  Senator 
from  Tennessee  is  concerned,  but  I  do  not  understand  that  the  Senator 
from  Illinois  makes  any  answer  to  the  question. 


REMARKS  OF  MR.  STANFORD. 
In  the  U.  S.  Senate  January  10,  1887. 

The  President  pro  tempore. — The  Senator  from  California  [Mr. 
Stanford]  has  the  floor. 

Mr.  Stanford. — Mr.  President,  I  shall  speak  to  this  bill  as  I 
understand  it.  In  what  I  shall  have  to  say  upon  the  measure  I  shall 
endeavor  to  be  entirely  candid  and  correct.  The  importance  of  the  sub- 
ject is  so  great  that  it  can  only  be  permanently  settled  upon  right  princi- 
ples. Anything  else  means  renewed  and  continued  disturbance.  The 
bill  under  consideration  provides  for  a  regulation  of  one  species  of  prop- 
erty not  common  to  others.  To  see  how  far  this  is  justifiable,  it  is  well 
for  us  to  consider  the  creation  of  railroads,  and  to  understand  how  they 
are  created. 

Railroad  companies  are  organized  under  the  general  laws  of  the  dif- 
ferent States.  They  have  no  exclusive  privileges.  They  are  associations 
aided  by  these  general  laws — laws  of  which  every  citizen,  or  an}'  number 
of  citizens,  may  avail  themselves  equally  with  those  forming  the  railroad 
company.  In  the  mere  fact  of  association  they  may  exist  entirely  with- 
out the  aid  of  the  State.  The  association  is  as  natural  as  it  is  for  one 
man  to  call  in  his  neighbors  to  help  him  raise  his  barn,  or  to  roll  a  saw- 
log,  or  to  do  any  business  not  inconsistent  with  the  rights  of  others.  The 
State  gives,  by  virtue  of  the  incorporation  laws,  nothing  to  the  incorpora- 
tion. Whatever  of  capital  or  labor  that  is  contributed  to  them  is  entirely 
private. 

The  ownership  of  the  labor  and  capital  provided  is  private;  as  much 
so  as  the  banker's  ownership  of  his  money,  the  farmer's  ownership  of  his 
farm,  the  teamster's  ownership  of  his  team,  and  so  on. 

It  is  private  labor  that  builds  the  railroad  from  the  first  shovelful  of 
dirt  that  is  thrown  until  the  last  spike  is  driven  and  the  road  is  ready  for 
business;  and  then,  when  it  is  ready  to  operate,  it  is  all  the  product  of 
individual  or  private  property. 

But  some  will  say  the  right  of  way  was  given.  In  regard  to  that  I 
think  there  is  much  misapprehension.  Those  who  desire  to  build  a  rail- 
road, of  course,  must  in  some  manner  obtain  the  right  of  way  on  which 
to  build  it.  They  appeal  to  the  State  on  the  ground  that  the  proposed 
investment  is  of  a  highly  beneficial  character  to  the  public,  and  they  ask 
the  State  to  exercise  its  right  of  eminent  domain  in  order  that  the  road 
may  be  built.  The  State  only  can  exercise  the  right  of  eminent  domain 
for  the  benefit  of  the  public,  and  then  upon  just  compensation  to  be  made 
to  the  owner  for  whatever  is  taken.  The  State  could  not  take  private 
property  for  the  benefit  of  A,  B,  C,  D,  E,  F,  and  others. 

Now,  up  to  this  time  everything  in  the  railroad  has  come  from  pri- 
vate sources,  and  the  labor  belongs  to  the  individuals  as  much  as  the 
labor  of  the  man  who  tills  a  farm. 

104 


INTER -STATE    COMMERCE    LAW.  105 

Control  is  the  essence  of  ownership.  The  value  of  the  property  is  its 
iucorne-producing  quality.  This  bill  strikes  at  the  control,  and  directly 
affects  the  income-producing  capacity  of  the  properties.  Now,  if  the 
investment  is  legitimate,  if  its  nature  is  so  highly  beneficial  that  the  State 
can  do,  to  aid  its  construction,  what  it  could  not  do  for  the  establish- 
ment of  a  factory  or  any  other  legitimate  business,  wherein  is  the  reason 
for  the  interference  with  the  values  and  the  control  of  this  property  ? 
No  monopoly  is  given  it ;  it  interferes  with  no  rights  previously  existing, 
and  is  never  used  except  when  it  offers  advantages  to  the  shipper  or 
traveler  superior  to  those  existing  before.  If  it  is  a  monopoly  it  is 
only  a  beneficent  one,  cheapening  and  facilitating  travel  and  commerce. 

Now,  if  the  State  has  given  nothing  to  this  railroad  company  but 
what  it  gives  to  every  other  citizen;  if  it  has  put  no  money  in;  if  the 
company  has  no  monopoly;  if  its  services  are  necessarily  of  a  beneficial 
character,  why  should  the  State  interfere  with  its  ownership  and  v  ith 
its  income-producing  quality?  And  if  the  State,  or  if  Congress,  im- 
pairs the  value  of  this  property,  why  should  not  compensation  be  made 
to  the  owners,  and,  before  putting 'into  operation  a  law  that  will  affect 
values,  ought  not  compensation  to  be  made  as  is  done  when  the  Govern- 
ment exercises  its  right  of  eminent  domain  and  condemns  the  propert)r 
of  A  that  the  road  may  be  built  which  the  company  pays  for?  By  a 
reduction  of  income-producing  qualities  the  value  of  the  very  right  of 
way  which  the  railroad  company  has  paid  for  is  affected. 

The  geography  and  topography  of  the  country  make  competition  a 
certainty.  This  bill  denies  to  the  railroad  the  right  to  charge  less  for  the 
greater  distance  than  for  the  shorter.  I  do  not  suppose  that  any  railroad 
company  ever  carried  freight  or  passengers  for  the  longer  distance  for 
less  than  for  the  shorter  unless  competition,  or  some  other  circumstance 
beyond  the  control  of  the  company,  compelled.  The  only  alternative 
would  be  to  yield  the  business.  It  is  a  principle  in  good  railroading  to 
reject  no  business  that  offers  if  it  can  possibly  be  done,  so  long  as  it  will 
pay  the  additional  expense  consequent  upon  its  own  movement.  A  very 
large  portion  of  the  traffic  of  the  country  is  done  below  the  average  cost. 
The  fixed  expenses  and  the  semi-fixed  expenses  of  a  railroad  company  are 
very  large.  They,  as  well  as  the  operating  expenses,  are  included  to 
make  the  average  cost  of  movement. 

The  average  of  operating  expenses  per  ton  is  a  very  different  figure 
from  that  of  the  average  cost  per  ton,  the  latter  including  operating 
expenses,  fixed  expenses,"  and  semi-fixed  expenses.  Thus,  take  the  busi- 
ness from  the  Atlantic  to  the  Pacific,  or  from  the  Pacific  to  the  Atlantic, 
and  we  find  competition  by  the  Isthmus  of  Panama  and  competition  by 
Cape  Horn;  we  find  overland  routes  of  different  length,  of  different 
grades  and  curves,  varying  in  volume  of  business  and  in  expenses  of  ope- 
rating. We  have  very  different  average  expense  for  movement.  The 
longer  road  must  compete  with  the  shorter.  The  road  with  the  heaviest 
gradients  must  compete  with  the  road  of  easier.  The  road  having  a 
small  volume  of  business  must  compete  with  the  road  having  a  large 
volume  of  business.  The  cost  of  fuel  is  a  very  important  item,  varying 
on  the  different  railroads.  Yet  the  road  having  the  lesser  volume  of 
business,  the  road  having  the  longest  line,  having  the  heaviest  grades  and 
curves,  having  the  higher  cost  of  fuel,  will  be  in  competition  with  and  will 


106  INTER -STATE    COMMERCE    LAW. 

have  to  carry  as  cheap  as  one  having  the  shorter  line,  the  easiest  gradients. 
the  cheapest  fuel,  and  the  largest  volume  of  business. 

All  these  are  factors  that  determine  the  rates  at  which  the  railroad 
may  possibly  do  business,  however  meager  the  profits.  All  the  overland 
lines  of  railroad  find  their  rates  very  largely  controlled  or  influenced  by 
the  routes  by  way  of  the  Isthmus  of  Panama  and  of  Cape  Horn;  meet- 
ing that  competition,  and  being  willing  to  accept  a  small  profit  where  a 
larger  can  not  be  had,  they  carry  along  the  line  between  the  two  extreme 
points  the  same  character  of  freight  at  less  rates  than  it  is  carried  from 
east  to  west,  or  from  west  to  east,  to  intermediate  places.  Thus,  because 
of  competition,  freight  going  from  New  York  to  San  Francisco  may  pass 
over  the  various  lines  of  road  making  up  a  through  line  for,  perhaps. 
half  their  regular  rates,  say  from  New  York  to  Buffalo,  from  Buffalo  to 
Chicago,  from  Chicago  to  Omaha,  from  Omaha  to  Salt  Lake,  and  so  on 
to  destination  on  the  Pacific  coast.  No  profit  is  so  small  as  to  be  despised. 
Business  is  done  at  that  rate  rather  than  not  do  it  at  all. 

Take  a  more  marked  illustration.  The  Southern  Pacific  road  strikes 
the  Atlantic  waters  at  a  much  less  distance  than  any  of  its  more  northern 
competitors.  It  has  a  line  of  easy  gradients  comparatively,  and  it  com- 
petes not  only  with  its  northern  rivals,  but  more  particularly  with  the 
Cape  Horn  and  Isthmus  of  Panama  routes,  because  of  its  shorter  line  and 
easy  gradients.  In  this  competition  it  often  takes  freight  between  the 
two  oceans  as  low  as  $10,  while  it  takes  freight  half  way  for,  say,  $30  a 
ton,  a  most  reasonable  rate  for  the  limited  local  business  of  that  country. 
Now,  if  it  makes  only  a  dollar  net  on  the  freight  from  San  Francisco  to 
New  Orleans  at  $10,  it  is  glad  to  make  that  dollar  where  it  can  get  no 
more;  but  a  ton  of  freight  going  to  El  Paso,  something  over  half  the 
distance,  will  pay  $30  a  ton.  Now,  if  the  freight  at  $10  to  New  Orleans 
pays  $1  profit,  the  freight  going  a  less  distance,  to  El  Paso,  would  pay 
as  much  profit  as  21  tons  going  through  to  New  Orleans;  and  the  rates 
charged  to  El  Paso  are  but  fair,  as  is  shown  by  the  gross  earnings  and  the 
grosi=f expenses  of  the  road,  leaving  but  a  very  narrow  net  profit. 

The  shorter  distance  is  not  charged  any  more  because  of  the  less  rate 
for  the  longer  distance.  Indeed  the  longer  distance  helps  the  railroad 
company  to  maintain  itself,  while  without  that  help  perhaps  they  could 
not  do  the  shorter  business  at  all.  Is  this  Congress  prepared  to  say  that 
small  earnings  shall  be  despised,  that  they  shall  not  be  secured  when 
greater  can  not  be  had?  Are  they  prepared  to  deny  to  individual  ship- 
pers and  communities  the  benefit  of  their  more'  favorable  location, 
whether  made  so  because  of  the  geography  and  topography  of  the  coun- 
try or  by  artificial  means?  It  is  the  misfortune  of  some  places  not  to  be 
so  well  located  and  not  the  fault  of  the  more  favorable  places  that  nature 
or  art  has  given  them  superior  advantages.  It  seems  to  me  that  Congress 
might  with  equal  propriety  deny  the  shipper  the  right  to  avail  himself  of 
these  natural  or  artificial  advantages  as  to  deny  to  the  railroad  the  right 
to  avail  itself  of  opportunities  to  meet  competition. 

There  is  a  class  of  freight  that  can  stand  only  a  certain  charge.  A 
greater  charge  becomes  prohibitory.  A  very  large  part  of  the  unmanu- 
factured raw  material  of  this  country  belongs  to  this  class,  paying  a  trifle 
over  the  additional  cost  consequent  upon  its  movement,  developing  a 
business  that  may  pay  better,  and  giving  its  small  portion  of  net  profit 


INTER -STATE    COMMERCE    LAW.  107 

above  the  cost  of  movement  towards  the  large  items  of  fixed  and  semi- 
fixed expenses.  Whether  a  road  is  doing  a  profitable  business  or  not  is 
not  determined  by  the  percentage  of  operating  expenses.  Thus  a  road 
carrying  valuable  goods  and  doing  a  small  business  may  find  its  percent- 
age of  operating  expenses  upon  the  amount  earned  very  small,  whereas, 
if" there  could  be  thrown  upon  it  in  addition  a  large  business  of  cheap 
transportation,  its  earnings  would  be  larger,  but  the  per  cent  of  operating 
expenses  would  be  increased ;  and  to  the  extent  that  there  was  a  net  earn- 
ing on  this  cheap  class  of  freight  just  so  far  the  company  would  be  bene- 
fited. The  long  haul  at  cheap  competing  rates  is  really  beneficial  to  the 
short  haul  at  non-competing  rates.  It  may  be  that  neither  alone  would 
maintain  the  road.  If  I  understand  this  bill  correctly,  under  it  the  long- 
lines  of  railroad  passing  through  different  States  will  have  to  give  up  one 
or  the  other.  It  will  be  practically  a  regulation  of  freight  within  the 
boundaries  of  a  State  and  making  a  barrier  of  the  boundary  of  a  State  to 
the  free  transmission  of  commerce. 

Since  the  first  road  was  built  in  the  United  States  up  to  this  time  the 
railroads  have  substantially  fixed  their  own  rates  for  service,  until  to-day 
the  rate  is  such  as  was  not  dreamed  of  as  possible  twenty  years  ago,  nor 
was  it  believed  possible  even  ten  years  ago.  The  whole  country  is  devel- 
oped. No  product  has  suffered  for  want  of  movement.  The  general 
railroad  management  of  the  country  is  careful  to  consider  what  the  cheap 
unmanufactured  products  of  the  country  can  afford  to  pay,  and  make 
their  rates  with  a  view  that  production  shall  not  be  hindered.  The  rates 
charged  for  manufactured  goods,  almost  without  an  exception,  do  not 
affect  the  producer  or  the  consumer.  If  the  rates  of  freight  upon  manu- 
factured articles  were  reduced  one-half,  the  probability  is  that  there  is 
nothing  that  moves  by  railroad  over  the  longest  line  in  the  country  whose 
price  to  the  consumer  would  be  affected  or  would  be  taken  into  consider- 
ation by  the  manufacturer;  but  the  fractional  part  of  a  cent  becomes  a 
serious  consequence  in  the  long  haul  to  most  of  the  raw  products  of  the 
country.     The  higher  the  maximums  the  lower  the  possible  minimums. 

Thus,  in  my  own  State,  the  maximum  rates  were  15  cents  per  ton  per 
mile.  With  an  average  cost  of  2  cents  a  mile  for  movement,  which  was 
about  the  average  at  one  time,  1  ton  of  freight  moved  at  15  cents  a  ton 
per  mile,  would  enable  the  railroad  to  move  14  tons  at  the  minimum  rate 
of  1  cent  a  ton  per  mile.  There  was  at  that  time  about  1  per  cent,  of  the 
business  done  at  the  maximum  rate,  while  the  other  99  per  cent,  was 
done  at  rates  governed  by  circumstances  and  influences  which  the  rail- 
road company  could  not  control. 

This  bill  seems  to  me  not  only  to  deny  competition  by  railroads, 
which  exist  almost  throughout  the  length  and  breadth  of  the  country, 
but  to  exhibit  a  tendency  to  foster  water  ways  to  the  positive  discourage- 
ment of  the  railroad  interests.  If  it  aimed  but  to  insure  the  water  lines 
of  communication  against  the  competition  of  rails,  I  do  not  know  how  a 
bill  could  be  framed  to  secure  that  object  better  than  this  one.  If  rail- 
roading is  a  legitimate  business,  and  if  it  is  only  the  aggregate  of  the 
private  property  contributed  by  the  stockholders;  if  it  is  maintained  and 
operated  by  the  labor  of  individuals,  what  justification  there  can  be  for 
depriving  the  owners  of  control,  and  the  property  of  its  full  earning 
capacity  "within  the  laws  as  they  existed  at  the  time  "of  the  original  invest- 


108  INTER -STATE    COMMERCE    LAW. 

ments,  I  am  unable  to  see.  It  seems  to  me,  clearly  it  is  a  violation  of  the 
rights  of  property,  and  the  rights  of  the  laborer  to  receive  a  compensation 
for  services  performed. 

It  is  also  a  discouragement  of  this  class  of  investments.  The  rail- 
roads up  to  this  time  have  received  the  peculiar  indorsement  of  being  of 
such  a  highly  beneficial  character  that  the  State  could  exercise  the  right 
of  eminent  clomain  to  the  end  that  the  road  might  be  built.  If  this  bill 
shall  become  a  law  its  consequences  will  be  most  disastrous,  in  my  judg- 
ment, to  the  varied  business  interests  of  the  country.  When  you  think 
that  most  of  the  products  of  the  country  pass  one  or  more  times  over  its 
railroads,  of  the  many  thousands  of  people  who  are  engaged  in  their 
operation,  the  many  more  thousands  whose  calling  depends  upon  these 
roads,  and  the  vast  volume  of  business  and  its  great  value  that  moves  over 
them,  it  seems  to  me  that  Congress  ought  to  consider  with  great  care  how 
far  these  investments,  these  industries  of  all  kinds  may  be  disturbed. 
That  they  will  be  largely  disturbed  it  seems  to  me  must  be  plain  to  the 
dullest  comprehension.  While  the  railroad  companies  have  practically 
been  as  free  to  manage  their  business  under  the  common  law  as  those 
engaged  in  other  callings  the  country  has  prospered,  accommodations 
have  been  given  and  are  given  that  promote  the  prosperity  of  every  in- 
dustiy.  There  has  been  no  taking  of  property  without  compensation,  no 
control  without  ownership,  and  the  anarchists  in  the  history  of  the  coun- 
try have  thus  far  found  little  justification  in  the  example  of  the  Govern- 
ment for  violent  taking  of  property.  There  can  be  no  valid  objection  to 
police  regulation,  but  only  to  that  attempted  regulation  which  goes  to 
and  affects  values  directly  and  inevitably. 


FINAL  REMARKS  OF  MR.  CULLOM. 
Ix  the  U.  S.  Senate,  January  14,  1887. 

Mr.  Cellom:.  Mr.  President,  I  feel  that  I  ought  to  say  something 
in  reference  to  this  bill  before  the  vote  is  taken.  I  believe  no  other  Sen- 
ator has  indicated  a  desire  to  speak.  I  have  great  reluctance  to  saying 
anything  upon  the  subject  myself  at  this  late  hour  in  the  night,  and  I 
promise  the  Senate  that  I  shall  detain  them  but  a  very  few  minutes,  and 
will  then  allow  the  vote  to  be  taken. 

I  have  been  sitting  here  to-day  listening  to  assaults  upon  this  bill 
until  I  have  almost  become  convinced  that  I  am  the  most  vicious  man 
toward  the  railroads  of  any  man  I  know.  I  started  in  upon  the  inves- 
tigation of  this  subject  two  or  three  years  ago  with  no  prejudices,  no 
bias  of  sentiment  or  judgment,  no  disposition  whatever  to  do  anything 
except  that  which  my  deliberate  judgment  told  me  was  the  best  thing  to 
do.  I  have  believed  that  I  occupied  that  position  ever  since  until  within 
the  last  twenty-four  hours,  when  the  attacks  upon  this  bill  have  been 
such  that  I  have  become  a  little  doubtf ul  whether  I  have  not  been  in- 
spired from  the  beginning,  so  far  as  my  action  has  been  concerned,  with 
a  determination  to  destroy  the  railroads  of  this  country.  To  listen  to 
the  Senator  from  Alabama  [Mr.  Morgan]  descanting  upon  the  pro- 
visions of  the  bill,  one  can  scarcely  resist  the  conclusion  that  it  is  a  bill 
to  destroy  the  commerce  of  the  country,  and  especially  to  break  clown  all 
the  railroads. 

So  far  as  I  am  concerned,  I  repeat  I  have  had  no  disposition  of  that 
kind,  and  I  am  unaware  that  either  of  the  Senators  upon  the  conference 
committee  with  me  has  had  any  such  disposition.  AVe  tried  to  do  the 
best  we  could  with  the  bill  that  the  Senate  passed  during  the  last  session, 
to  keep  the  bill  as  near  to  what  the  Senate  had  it  as  we  could  do,  and  to 
arrive  at  an  agreement  between  the  House  and  the  Senate  confreres. 

I  submit  that  the  majority  of  the  assaults  on  the  bill  now  under  con- 
sideration have  been  against  provisions  that  were  in  the  bill  when  the 
Senate  voted  for  it  during  the  last  session  of  Congress.  I  am  of  the 
opinion  that  if  this  discussion  lasted  another  clay  Senators  would  find  in 
every  line  of  the  bill  a  very  serious  objection  to  its  adoption.  They 
started  in  by  objecting  to  some  portions  of  the  fourth  and  fifth  sections. 
The  Senator  who  has  just  concluded  his  remarks  got  over  to  the  thir- 
teenth section,  and  I  believe  went  one  or  two  sections  beyond  that,  and 
if  there  were  any  more  speeches  to  be  made  against  the  bill  I  suppose  the 
very  last  section  of  it  would  be  attacked  before  a  vote  was  taken.  ■ 

The  Senate  conferees  regarded  it  as  their  duty  to  cling  to  every  por- 
tion of  the  Senate  bill  as  it  was  passed  that  they  could  cling  to  and  reach 
an  agreement  between  the  conferees  of  the  House  and  the  Senate.  Hence 
it  was  that  all  those  portions  of  the  Senate  bill  not  objected  to  by  the 

109 


110  INTER -STATE    COMMERCE    LAW. 

House  conferees  were  allowed  to  remain  in  the  bill  by  the  Senate  con- 
ferees, the  Senate  conferees,  as  a  matter  of  course,  believing  that  the 
Senate  of  the  United  States  knew  what  it  was  doing  when  it  voted  for 
the  bill  in  the  first  place,  and  thinking  that  it  would  remain  of  the  same 
mind  still. 

The  attacks  upon  the  fourth  section  have  not  been  based  so  much 
upon  the  changes  the  conference  committee  made  in  that  section  as  upon 
the  language  which  was  placed  there  by  the  Senate  of  the  United  States 
by  its  vote;  and  yet  the  conferees  of  the  Senate  have  been  regarded  as  at 
fault,  to  say  the  least,  because  they  did  not  strike  out  the  words  which 
the  Senate  had  put  in. 

The  Senator  from  Georgia  [Mr.  Brown]  assaults  the  bill  because  he 
says  that  under  it  the  provisions  are  so  rigid  that  the  railroads  of  the 
country  can  not  do  business  at  all.  The  Senator  from  Oregon  [Mr. 
Mitchell]  assaults  the  bill  because,  he  says,  the  fourth  section  amounts 
to  nothing,  and  that  the  words  "under  like  circumstances  and  condi- 
tions" ought  to  be  taken  out. 

The  Senator  from  Massachusetts  [Mr.  Hoar]  assaults  the  bill  because, 
he  says,  it  is  going  to  interfere  with  foreign  commerce,  and  that  the 
fourth  section  will  be  construed  as  not  allowing  a  rebate  of  5  cents  a 
hundred  upon  commerce  shipped  across  the  country  for  exportation. 
So  he  thinks  the  bill  ought  not  to  be  agreed  to,  while,  except  as  to  the 
words  "from  the  same  original  point  of  departure"  and  "the  same 
point  of  arrival,"  the  section  is  substantially  just  the  same  as  it  was  when 
it  passed  the  Senate  before. 

So  I  might  go  on  referring  to  every  Senator  who  has  spoken  against 
the  bill,  and  nearly  every  one  of  them  has  founded  his  objections  to  the 
bill  upon  the  use  of  language  that  he  had  previously  voted  for  in  the 
Senate  of  the  United  States  before  the  bill  went  to  the  conference  com- 
mittee at  all. 

I  shall  detain  the  Senate  only  a  few  moments,  but  I  desire  to  reiterate 
what  I  uttered  upon  the  subject  before,  confining  myself  to  the  short- 
haul  provision  which  is  contained  in  the  fourth  section  of  the  bill.  The 
Senator  from  Massachusetts  and  others  have  arraigned  me  as  having 
placed  a  construction  upon  the  bill  different  from  the  other  conferees  on 
the  part  of  the  Senate  as  to  the  question  whether  in  a  line  made  up  of  a 
number  of  roads  the  proportion  that  one  road  was  to  get  was  a  criterion 
by  which  it  should  be  governed  in  the  charges  over  its  own  road  accord- 
ing to  the  published  rates  made  out  by  the  road  itself. 

In  other  words,  as  I  said  before,  taking  the  Albany  and  Boston  road 
as  an  illustration,  it  may  take  freight  from  Kansas  City,  from  Chicago, 
from  Detroit,  or  from  any  other  point  coming  in  on  different  lines,  and 
the  rate  per  cent,  that  it  gets  of  that  through  traffic  has  no  control  what- 
ever over  the  charges  that  it  sees  proper  to  make  over  its  own  line  and 
over  the  freight  that  it  gets  along  its  line.  The  conferees  on  the  part  of 
the  Senate  agree  with  me  in  that  proposition,  and  when  you  agree  that 
that  is  the  right  construction  to  be  placed  upon  the  bill,  then  I  say  that 
all  this  long-haul  business  that  goes  from  west  to  east  or  from  east  to 
west  is  not  seriously  affected  by  the  provisions  of  the  fourth  section. 

The  Senator  from  Massachusetts  has  been  apparently  disposed  to 
kill  the  bill  by  taking  depositions  of  different  parties  over  the  country 


INTER -STATE    COMMERCE    LAW.  Ill 

and  of  the  conferees  on  the  part  of  the  House.  I  submit  that  the  answer 
by  Judge  Crisp  to  the  questions  put  to  him  by  the  Senator  from  Massa- 
chusetts is  not  conclusive  upon  the  point  that  we  have  been  insisting 
upon.  Judge  Crisp  does  not  say  in  any  line  or  word  employed  by  him 
that  the  construction  placed  upon  that  provision  by  the  Senate  conferees 
is  different  from  what  we  have  stated  upon  this  floor.  The  only  thing 
that  that  conferee  says  in  reference  to  it  about  which  there  might  be  any 
difference  is  simply  as  to  the  meaning  of  the  words  "  under  like  con- 
ditions and  circumstances." 

I  have  not  said  that  upon  an}'  given  statement  of  facts  as  put  to  me 
by  any  member  of  the  Senate  the  bill  meant  one  thing  or  the  other;  but  I 
have  said,  and  I  submit  that  any  candid  man  must  agree  with  me,  that  in 
the  construction  of  the  proposed  statute,  in  the  application  to  the  trans- 
portation of  freight  from  one  part  of  the  country  to  another,  where  the 
words  "under  like  circumstances  and  conditions"  are  used,  they  must  be 
considered  as  an  element  in  determining  whether  a  shipment  of  freight 
from  one  point  is  to  be  governed  by  the  same  rule  that  governs  it  as 
to  charges  from  another  point.  That  is  all  I  have  contended  for.  Judge 
Crisp  expressed  the  opinion  on  the  state  of  facts  put  by  the  Senator  from 
Massachusetts  to  him,  that  the  circumstances  under  the  bill,  as  he  con- 
strued it,  would  be  the  same.  We  might  differ  upon  that  point  or  we 
might  not,  but  it  is  no  ground  for  declaring  that  the  conference  committee, 
either  on  the  part  of  the  Senate  or  the  House,  disagree  as  to  the  meaning 
of  the  provisions  of  the  bill. 

Mr.  President,  I  do  not  believe  that  I  ought  to  talk  about  this  meas- 
ure any  longer,,  because  I  know  every  Senator  wants  to  vote,  and  I  sup- 
pose if  I  talked  here  two  hours  what  I  might  say  would  not  change 
a  vote  in  the  Senate. 

Mr.  Sewell.     Will  the  Senator  allow  me  to  ask  him  one  question  ? 

Mr.  Cullom.     Certainly. 

Mr.  Sewell.  I  desire  to  satisfy  my  own  mind  before  voting  on  the 
bill.  Suppose  a  merchant  in  New*  York,  a  grain  shipper,  orders,  as 
is  frequently  done,  two  or  three  million  bushels  of  wheat,  taking  advan- 
tage of  the  markets  of  Europe  and  watching  closely  the  shipments  from 
the  Black  Sea  and  other  ports,  and  also  the  Indian  market.  He  finds 
that  he  can  make  2  or  3  cents  a  bushel  by  the  shipment  of  a  large  lot  of 
wheat.  He  will  order  from  Duluth  half  a  million  bushels,  from  Mil- 
waukee half  a  million  bushels,  from  Chicago  half  a  million  bushels, 
from  St.  Louis  half  a  million  bushels,  dividing  his  order.  If  the  wheat 
is  shipped  by  car-loads  under  similar  circumstances  in  every  particular, 
even  under  the  same  ownership  and  at  the  same  time,  and  it  may  all 
arrive  at  Buffalo  or  at  a  point  on  the  Pennsylvania  Railroad,  the  pro  rata 
on  one  shipment  allowed  to  the  trunk  lines,  taking  the  New  York 
Central,  for  instance,  going  to  Boston,  but  going  through  New  Yrork, 
that  coming  from  Duluth  may  come  at  10  cents  a  hundred;  that  coming 
from  Milwaukee  may  come  at  9;  that  coming  from  Chicago,  being  the 
greatest  point  of  competition,  may  come  at  8,  and  from  St.  Louis  may 
come  at  9  or  10. 

All  this  being  similar  freight  under  like  circumstances,  by  the  same 
ownership,  in  car-loads  arriving  at  the  trunk-line  point  at  the  same  time, 
the  company  having  accepted  the  lowest  rate — that  is,  where  the  greatest 


112  INTER -STATE    COMMERCE_  LAYT. 

competition  is,  say  at  Chicago — can  that  railroad  company  take  any  more 
for  any  of  the  freight  that  comes  off  the  other  lines  for  the  same  party  ? 

Mr.  Cullom.  The  Senator's  question  is  pretty  long.  I  have 
asserted  the  proposition  that  a  proper  construction  of  the  bill  gives  to 
railroads  the  right  to  make  combinations  or  arrangements  for  a  continu- 
ous shipment.  One  railroad  makes  its  own  tariff  rate,  another  railroad 
makes  its,  and  the  third  makes  its  tariff  of  rates,  and  each  one  of  those 
roads,  so  far  as  its  own  business  is  concerned,  is  to  be  governed  by  that 
tariff  of  rates. 

But  here  come  two  roads,  or  four  roads,  converging  into  one,  if  you 
please.  It  is  the  very  same  illustration  that  I  gave  the  other  day.  One 
line  is  composed  of  roads  from  Kansas  City  to  Boston  byway  of  Albany; 
another  line  is  composed  of  the  roads  from  Chicago  to  Boston  by  way  of 
Albany;  a  third  line  is  composed  of  a  railroad  or  railroads  from  Detroit 
to  Boston  by  way  of  Albany,  and  so  you  may  go  on.  I  assert  that  the 
rate  of  one  of  those  lines  beginning  at  Kansas  City,  if  you  please,  and 
running  to  Boston,  has  nothing  to  do  with  the  rate  of  the  road  that 
begins  at  Chicago  and  goes  to  Boston,  or  from  Detroit  and  goes  to  Bos- 
ton. In  other  words,  those  continuous  routes  make  their  own  arrange- 
ments, just  what  they  please,  so  far  as  any  other  road  is  concerned,  and 
they  are  bound  thereby,  but  the  other  roads  are'not.  So  in  a  shipment 
from  Kansas  City  to  Albany  and  to  Boston,  if  the  Albany  and  Boston 
road  only  got  2  cents  for  carrying  it  from  Albany  to  Boston,  it  would 
not  interfere  with  its  right  to  get  5  cents  on  the  line  carrying  it  from 
Chicago  to  Boston  by  way  of  Albany,  or  whatever  other  sum  it  might 
arrange  with  the  other  roads. 

Mr.  Sewell.     The  Senator  evades  the  direct  question. 

Mr.  Cullom.    I  think  not. 

Mr.  Sewell.  My  point  was  the  same  ownership,  the  same  indi- 
vidual making  all  these  shipments,  and  the  shipments  converging  on  the 
same  line. 

Mr.  Cullom.  Does  the  Senator  mean  the  same  ownership  of  prop- 
erty; the  same  freight  ? 

Mr.  Sewell.  Yes,  sir;  I  mean  that  a  commission  merchant  in  Xew 
York  will  order  two  or  three  million  bushels  from  different  points,  and 
that  freight  will  converge  from  different  lines.  I  say  under  the  restric- 
tion of  this  bill  that,  having  accepted  the  lowest  pro  rata  rate  on  that 
portion  of  the  line,  the  company  is  restricted  from  taking  a  higher  rate, 
although  the  pro  rata  would  allow  it. 

Mr.  Cullom.  I  contend  exactly  the  contrary  in  my  view  of  the 
construction  of  the  section.  I  imagine  that  any  other  construction  of  it 
would  bring  upon  the  railroads  and  upon  the  country  great  confusion. 
It  does  not  make  any  difference  what  the  railroad  from  Chicago  to  Bos- 
ton charges  if  it  is  one  line,  or  what  the  railroad  from  Kansas  City  to 
Boston  charges  if  it  makes  another  continuous  line.  I  repeat  that  the 
per  cent,  the  railroad  gets  from  Albany  to  Boston  on  the  shipment  from 
Chicago  to  Boston  has  nothing  to  do  with  the  per  cent,  that  it  gets  on  the 
line  from  Kansas  City  to  Boston. 

This  is  the  whole  case.  So  the  argument  of  the  Senator  from  Rhode 
Island  [Mr.  Aldricii]  with  his  chart  amounts  to  nothing  if  my  construc- 
tion and  the  construction  of  the  conferees  on  the  part  of  the  Senate  is  to 


INTER -STATE    COMMERCE    LAW.  113 

be  taken  as  the  correct  view  of  the  bill.  That  is  what  I  contend  for,  and 
you  can  not  put  any  other  construction  upon  it  consistent  with  the  busi- 
ness of  the  country  and  with  the  language  of  the  bill  itself. 

The  Senator  from  Alabama  [Mr.  Morgan]  is  very  much  exercised 
on  account  of  the  extraordinary  powers  that  are  given  by  the  bill,  and 
on  account  of  the  difference  of  opinion  which  seems  to  prevail  in  the 
Senate  as  to  the  meaning  of  the  language  of  the  fourth  section  and  other 
portions  of  the  bill.  He  says  that  the  Supreme  Court  oscillates  in  its 
opinions  upon  statutes  from  year  to  year.  That  is  true  ;  there  is  no 
doubt  about  it.  So  if  the  Supreme  Court  of  the  United  States  has  one 
opinion  one  year  and  possibly  modifies  it  another,  it  is  not  surprising  that 
any  language  which  may  be  incorporated  in  any  bill  brought  in  here 
upon  this  subject  will  be  differently  construed  by  different  Senators  upon 
this  floor. 

I  undertake  to  say  that  there  are  not  three  men  in  the  Senate  who 
can  draught  a  provision  into  this  bill  incorporating  the  ideas  of  the  fourth 
section,  or  upon  the  short-haul  question  at  all,  that  will  be  construed 
alike  by  every  member  of  the  Senate.  I  defy  any  one  to  do  it.  We 
have  never  supposed  until  to-day  that  any  man  on  earth  could  miscon- 
strue the  language  when  it  says  that  you  shall  not  charge  more  in  the 
aggregate  for  the  short  haul  than  for  the  long  haul  on  the  same  line  and 
going  in  the  same  direction,  and  yet  the  Senator  from  Georgia  comes  in 
here  with  a  telegraphic  account  of  a  decision  in  North  Carolina,  which 
says  that  those  words  which  everybody  here,  I  think,  agreed  meant  in 
the  aggregate,  and  not  a  pro  rata  per  mile  per  ton,  do  not  even  mean  what 
we  have  all  understood  them  to  mean  before. 

So  you  see  that  you  may  use  the  plainest  language  that  can  be  writ 
ten,  and  yet  courts  as  well  as  Senators  may  differ  as  to  the  construction 
of  the  language  when  it  comes  to  be  applied  to  the  transportation  of 
the  country.  It  is  a  pretty  difficult  thing.  I  have  done  my  best  in 
trying  to  get  something  that  the  country  could  understand,  and  at  the 
same  time  do  something  that  would  benefit  the  people  of  this  country, 
but  I  begin  to  think  that  I  have  made  an  utter  failure  in  getting  anything 
at  all  that  any  one  ever  can  understand  to  mean  what  I  supposed  ft 
meant. 

The  Senator  from  Alabama  refers  to  the  extraordinary  powers  of  the 
commission  to  the  fact  that  the  testimony  taken  by  the  commission  is  to 
be  prima  facie  evidence  of  the  truthfulness  of  ihe  testimony  in  a  court 
of  record.  This  is  not  extraordinary.  Take  some  of  the  State  laws  of 
the  country  to-day.  Take  the  State  of  Illinois,  for  instance.  The  com 
mission  of  the  State  of  Illinois  makes  out  a  freight  bill  and  publishes  it. 
It  becomes  the  law  until  it  is  overturned  by  proof  produced  by  a  trans- 
portation company  that  the  rates  which  are  fixed  in  the  freight  bill  are 
not  reasonable  and  just. 

The  provision  making  the  testimony  taken  by  the  commission  as  to 
the  conduct  of  a  common  carrier  prima  facie  evidence  is  based  on  the 
fact  that,  as  we  all  know,  the  railroads  have  locked  up  within  their  own 
control  and  their  own  knowledge  all  the  facts  which  operate  on  them  in 
making  any  given  rate,  and  there  is  no  way  to  get  at  the  facts  except  by 
throwing  the  onus  of  proof  upon  them  that  the  rates  which  they  charge 


114  INTER -STATE    COMMERCE    LAW. 

are  reasonable  and  not  unreasonable  and  unjust.  Is  there  anything 
wrong  in  that  ? 

While  I  am  talking  about  that  I  desire  to  say  that  one  of  the  ablest 
railroad  commissions  in  the  United  States  is  the  railroad  commission  in 
New  York.  The  chairman  of  that  commission,  Mr.  Kernan,  a  very 
able  lawyer  and  a  very  able  commissioner,  insisted  before  the  select  com- 
mittee of  the  Senate  that  unless  we  did  something  of  that  sort  the  rail- 
roads would  beat  the  people  every  time  in  a  controversy  between  the 
railroads  and  the  individual  shipper  as  to  whether  the  rate  was  reason- 
able and  just  or  not, 

So  we  incorporated  that  provision  in  the  bill,  but  there  has  been  no 
disposition  on  the  part  of  the  Senate  committee,  in  the  first  place,  or  on 
the  part  of  the  conferees,  in  the  second  place,  to  insert  any  undue  pro- 
vision in  the  bill  that  was  going  to  do  a  great  injury  to  the  corporations 
of  the  country.  That  provision,  too,  was  in  the  bill  reported  by  the 
select  committee  of  the  Senate,  discussed  here  for  a  month  or  two  during 
the  last  session  of  Congress,  and  voted  in  by  the  Senate  of  the  United 
States;  and  yet  the  conferees  of  the  Senate  are  berated  to-day  because 
there  is  such  a  provision  in  the  bill,  and  that,  too,  it  is  said,  has  come 
from  the  conference  committee. 

The  trouble  about  this  whole  thing,  Mr.  President,  is  in  the  fact  that 
hardly  anybody  believed  there  was  going  to  be  an  interstate- commerce 
bill  passed  hj  this  Congress  until  the  conference  committee  reported. 
When  I  say  hardly  anybody,  I  refer  to  the  men  who  did  not  believe  in 
any  legislation  at  all  that  should  interfere  with  the  freedom  of  the  rail- 
road companies  of  the  country  in  doing  and  charging  what  they  pleased 
without  any  power  on  the  part  of  the  people  to  prevent  it. 

But  when  they  are  met  by  a  conference  report,  agreed  by  the  con- 
ferees of  the  two  Houses,  and  it  simply  becomes  a  question  whether  the 
Senate  will  adopt  the  conference  report,  knowing  that  when  it  does  in  all 
probability  very  soon  thereafter  the  bill  will  become  a  law,  then  the  men 
interested  on  the  other  side  of  this  question  rally  to  the  support  of  the 
transportation  companies,  and  they  find  all  manner  of  difficulties  v,  ith 
the  bill  which  has  been  brought  into  the  Senate. 

Sir,  it  has  just  come  to  the  point  when  you  have  got  to  face  the 
music  and  vote  for  an  interstate-commerce  bill  or  vote  it  down.  That 
is  all  there  is  of  it.  I  have  nothing  more  to  say.  I  have  discharged  my 
duty  as  best  I  know  how.  I  reported  on  the  part  of  the  Senate  conferees 
the  bill  that  is  before  you.  I  am  not  responsible  for  what  the  Senate 
does  with  it.  I  am  not  going  to  find  fault  with  anybody  in  the  Senate 
upon  the  question,  whether  we  concur  in  the  report  or  reject  it,  but  I 
warn  Senators  that  the  people  of  the  United  States  for  the  last  ten  years 
have  been  struggling  to  assert  the  principle  that  the  Government  of  the 
United  States  has  the  power  to  regulate  transportation  from  one  end  of 
this  country  to  the  other. 

We  are  now  just  at  the  point  whether  we  will  decide  it  or  whether 
we  will  set  the  question  afloat  again  for  another  Congress  that  comes  in 
after  the  4th  of  March.  I  am  not  going  to  say  that  I  know  if  the  report 
is  not  concurred  in  we  shall  get  no  legislation.  I  shall  not  say  that,  but  I 
am  going  to  say  that  I  in  my  heart  believe  that  it  is  very  doubtful,  t->  say 
the  least,  whether,  if  the  report  is  defeated,  we  shall  get  any  legislation 


INTER -STATE    COMMERCE    LAW.  115 

during  the  present  Congress.    So  when  the  Senate  acts  upon  the  question 
my  duty  wfi  have  been  done  so  far  as  I  am  able  to  see  it. 

I  confess  that  there  are  provisions  in  this  bill  which  I  do  not  like. 
I  would  have  preferred  the  bill  that  I,  as  chairman  of  the  select  com- 
mittee, reported  to  the  Senate.  I  would  have  preferred  the  bill  the 
Senate  passed  during  the  last  session.  I  went  into  the  conference  com- 
mittee hoping  and  struggling  to  get  the  bill,  pure  and  simple,  that  we 
had  passed  in  the  Senate  during  the  last  session  of  Congress.  But  I 
could  not  get  it.  I  understand  that  if  a  conferee  can  not  get  all  that  he 
wants,  and  all  that  the  body  he  represents  asks  for,  in  a  case  of  vital 
importance,  it  is  his  duty  to  do  the  best  he  can  under  all  the  circum- 
stances, and  agree,  if  he  can  afford  to  do  it  consistent  with  his  sense  of 
public  duty. 

That  we  did,  and  we  have  submitted  this  report.  As  I  said  before, 
it  is  for  the  Senate  now  to  discharge  its  duty  and  vote  for  it  or  vote 
against  it,  as  it  sees  proper.  If  it  shall  vote  the  conference  report  down, 
I  shall  hope  that  we  may  get  something  better  in  the  place  of  it,  and  if 
I  had  anything  to  do  with  the  next  effort,  I  should  do  the  very  best  I 
could  to  get  a  bill  more  in  harmony  with  my  own  sense  of  what  is  right 
as  well  as  with  the  expressions  made  by  Senators  in  the  discussions  upon 
this  bill. 

But  I  repeat,  every  Senator  must  take  his  own  responsibility  in 
making  up  his  mind,  and  in  the  light  of  the  uncertainty  of  getting  any 
legislation  and  thereby  letting  it  go  out  to  the  counti  y  that  the  railroads 
are  still  masters  of  the  situation,  you  must  vote  as  your  judgments  may 
dictate. 

I  have  believed  from  the  time  I  have  given  any  attention  to  public 
affairs  that  it  was  necessary  to  bring  into  force  the  provision  of  the  Con- 
stitution giving  Congress  the  power  to  regulate  commerce  among  the 
States.  The  Senator  from  New  York  [Mr.  Evauts]  attacked  the  bill 
and  said  that  it  was  unconstitutional,  because,  as  I  understood  him,  the 
Constitution  was  framed  on  that  subject  for  the  purpose  of  facilitating 
commerce,  and  that  this  was  a  bill  to  hinder  or  to  militate  against  it. 

I  undertake  to  say  that  the  purpose  of  the  bill,  at  least  whatever  may 
be  the  strained  construction  which  has  been  placed  upon  it  or  which 
may  be  placed  upon  it  by  the  transportation  companies  of  the  country, 
has  been  to  facilitate  commerce  and  to  protect  the  individual  rights  of 
the  people  as  against  the  great  railroad  corporations.  I  have  no  disposi- 
tion to  do  the  railroads  of  the  country  any  harm.  I  have  no  disposition 
to  interfere  with  their  legitimate  business.  I  have  no  disposition,  God 
knows,  to  interfere  with  the  commerce  of  the  country,  properly  con- 
ducted. But  I  do  say  that  it  is  the  duty  of  the  Congress  of  the  United 
States  to  place  upon  'the  statute-book  some  legislation  which  will  look 
to  the  regulation  of  commerce  upon  the  railroads  so  that  they  will  not 
treat  one  man  differently  under  similar  conditions  and  circumstances 
from  another. 

It  has  been  said  over  and  over  again  here  that  the  railroad  com- 
panies would  build  up  one  man  and  crush  another;  that  their  policy  has- 
been  to  destroy  one  locality  or  city  and  build  up  another.  Here  we  have 
undertaken  to  so  regulate  them  as  to  prevent  them  from  doing  those 
things  so  far  as  we  could  do  so. 


116  INTER- STATE    COMMERCE    LAW. 

The  Senator  from  Massachusetts  has  arrayed  a  great  number  of  wit- 
nesses against  this  bill  from  his  own  city  and  from  other  places.  "While 
he  was  making  his  speech  I  received  a  dispatch  from  a  man  by  the  name 
of  Edward  Kemble.  While  I  do  not  now  personally  remember  exactly 
the  individual  business  in  which  he  is  engaged,  I  do  remember  that 
the  Senator  himself  gave  me  his  name  before  he  went  to  his  city  to  take 
testimony  as  one  of  the  men  who  would  be  well  advised  upon  the  sub- 
ject, and  who  would  testify  before  us.    Mr.  Kemble  says,  addressing  me: 

Boston,  Mass.,  January  14,  1887. 
Don't  think  the  action  of  Chamber  of  Commerce  here  can  be  sustained.      I  am  a 
member,  and  an  exporter  of  breadstuffs,  and  heartily  approve  your  bill. 

EDWARD  KEMBLE. 

Here  is  a  telegram  which  I  received  from  another  citizen  of  that 
State  who,  I  believe,  was  before  the  committee: 

Boston,  Mass.,  January  8,  1887. 
SenatorCullom,  Washington,  D.  C.  : 

The  interstate-commerce  act  ought  to  become  a  law  because  the  railroad  manage- 
ment of  late  have  built  up  a  class  of  favored  shippers,  thus  putting  a  premium  on 
dishonesty. 

GEO.  H.   BE  AM  AS,  168  State  Street. 

I  suppose  the  Senator  from  Massachusetts  knows  both  of  these  gen- 
tlemen. 

Mr.  Hoar.  May  I  ask  the  Senator  if  he  does  not  see  very  clearly 
th  it  both  the  gentleman  who  sent  in  those  dispatches  sent  them  in  the 
belief  that  the  bill  does  not  mean  what  he  says  it  means,  but  that  it 
means  what  the  House  conferees  say;  that  is,  the  dispatch  shows  that  the 
sender  wants  to  break  up  this  system  of  rebate  for  the  foreign  commerce 
which  the  Senator  thinks  will  still  be  preserved  by  the  bill? 

Mr.  Cullom.  I  do  not  understand  that  I  have  a  right  to  draw  any 
such  conclusion.  These  gentleman  have  had  copies  of  the  bill.  There 
is  not  a  city  in  the  United  States  where  there  is  a  board  of  trade  or  a 
chamber  of  commerce  that  has  not  given  almost  constant  study  to  the 
provisions  of  this  bill  for  the  last  ten  days  or  more.  There  is  a  difference 
of  opinion  in  reference  to  what  the  effect  will  be  upon  the  commerce  of 
the  country. 

Mr.  President,  a  word  or  two  more  and  I  shall  close.  I  think  the 
Senator  from  California  [Mr.  Stanford]  is  perfectly  consistent  with 
himself  in  opposing  this  bill,  because  he  comes  before  the  Senate  and 
frankly  and  honestly — and  I  honor  him  for  it — says  that  he  is  against  it 
and  states  one  special  reason  why.  He  says  that  from  San  Francisco  to 
New  Orleans  he  can  only  charge  a  rate  that  would  perhaps  give  him  a 
dollar  a  ton,  while  from  San  Francisco  half  way  to  New  Orleans  at  some 
uncompeting  place  he  can  charge  two  or  three  times  the  amount,  and, 
therefore,  he  does  not  want  the  Government  of  the  United  States  to 
interfere  with  that  privilege.  He  is  perfectly  honest  about  it.  He  states 
the  exact  facts  I  have  no  doubt,  and  says  he  does  not  want  to  be  inter- 
fered with.  Well,  sir,  I  dislike  very  much  to  favor  any  bill  that  would 
interfere  with  what  the  Senator  from  California  believes  to  be  an  honest 
right  on  his  part ;  but  I  must  insist  that,  while  there  may  be  occasionally 
an  instance  such  as  the  Senator  referred  to,  it  ought  not  to  stand  in  the 
way  of  general  legislation  needed  to  protect  the  great  masses  of  the  people 
against  unjust  discrimination  by  the  railroads  of  the  country. 


INTER -STATE    COMMERCE    LAW.  117 

The  Senator  from  Alabama  [Mr.  Morgan]  says  we  had  better  go 
slow  and  remain  quiet  under  the  old  regime.  Well,  Mr.  President,  I  remem- 
ber only  a  few  days  ago  hearing  the  Senator  from  Alabama  alleging  that 
the  railroads,  the  common  carriers  of  the  country  were  eating  up  the  peo- 
ple, were  destroying  the  interests  of  the  people.  I  do  not  know  whether 
lie  confined  that  remark  to  his  own  State  or  extended  it  to  the  whole 
country,  but  I  should  have  inferred  from  the  language  he  used  against 
the  railroad  companies  that  he  would  have  been  in  favor  of  almost  any 
legislation  that  would  in  any  way  restrict  them  in  their  reckless  disregard 
of  the  rights  of  the  people.  I  can  only  conclude  that  the  Senator  from 
Alabama  would  rather  that  destructive  system  should  go  on,  as  he 
charged  it  to  exist  when  he  made  his  speech  jthe  other  day,  without 
control,  than  to  trust  a  commission  who,  he  says,  are  individually  liable 
to  corrupt  influences,  either  at  the  hands  of  the  President  or  somebody 
else  outside. 

Sir,  we  have  got  to  trust  somebody.  We  must  either  leave  this 
matter  to  the  discretion  and  judgment  and  sense  of  honor  of  the  officers 
of  the  railroad  companies,  or  we  must  trust  the  commission  and  the 
courts  of  the  country  to  protect  the  people  against  unjust  discriminations 
and  extortions  on  the  part  of  common  carriers.  Who  is  it  that  is  most 
liable  to  be  controlled  wrongfully  ?  Is  it  the  President  of  the  United 
States  as  against  a  corporation  ?  Is  it  an  honest  commission  honestly 
selected  by  the  President  of  the  United  States  as  against  a  railroad  com- 
pany ?  I  say  there  are  not  those  inducements  to  be  placed  in  the  hands 
of  a  set  of  men  selected  for  their  integrity,  selected  for  their  ability, 
selected  for  their  capacity  to  regulate  these  railroads  and  enforce  the  law, 
that  are  left  in  the  hands  of  the  officers  of  the  railroad  companies  them- 
selves. 

I  take  it  that  there  is  somebody  honest  in  this  country  and  that  the 
President  of  the  United  States,  if  this  bill  becomes  a  law,  will  select  the 
broadest-gauge  men,  the  men  highest  in  integrity  and  intelligence  as  the 
men  to  enforce  this  law  as  against  the  corporations  and  as  a  go-between, 
if  you  please,  between  the  shippers  and  the  railroads  of  the  country.  I 
am  willing  to  trust  them.  If  they  are  not  honest  the  President  has  the 
right  to  remove  them,  and  if  the  shipper  is  unwilling  to  submit  to  their 
judgment,  under  this  bill  he  has  a  right  to  go  directly  to  the  courts.  I 
say  there  is  not  anything  that  can  be  done  by  these  corporations  against 
individuals  where  the  shipper  himself  has  not  a  right  to  get  into  court  in 
some  way  or  other  if  he  is  not  willing  to  abide  by  the  decision  of  the 
commissioners  appointed  by  the  President. 


REMARKS  OF  MR.  CRISP    OF   GEORGIA 
Ix  the  House  of  Represextatives,  Jaxuary  18,  1887. 

Mr.  Crisp.  I  ask  unanimous  consent  that  the  reading  of  the  report 
of  the  conference  committee  be  dispensed  with.  It  has  been  printed  in 
the  Record  by  order  of  the  Senate,  and  again  printed  in  the  Record  by 
order  of  the  House.  I  have  no  doubt  it  is  familiar  to  members  and  any 
gentleman  desiring  to  do  so  can  send  for  a  copy  in  document  form,  and 
have  it  before  him  as  we  go  on  with  the  consideration  of  the  bill.  In  the 
interest  merely  of  economy  of  time  I  ask  unanimous  consent  to  dispense 
with  the  reading  of  that  report. 

Mr.  O'Neill,  of  Pennsylvania.  The  gentleman  from  Georgia  will 
permit  me  to  say  I  do  not  desire  to  have  any  time  consumed  simply  for 
the  purpose  of  consuming  time.  But  I  think  it  best  that  this  report 
should  be  read.     It  will  not  take  more  than  fifteen  minutes  to  read  it. 

The  Speaker.  The  gentleman  from  Georgia  asks  unanimous  con- 
sent to  dispense  with  the  reading  of  the  report  of  the  conference  com- 
mittee, it  having  already  been  printed  in  the  Record.  Is  there  ob- 
jection ? 

Mr.  Duxham.  I  do  not  care  to  have  the  bill  read,  but  I  think  the 
report  ought  to  be  read.  The  report  of  the  conferees  is  all  that  I  desire 
to  have  read. 

Mr.  Crisp.  I  do  not  ask  to  dispense  with  reading  the  explanatory 
statement  of  the  conferees, but  only  the  formal  report  of  the  committee. 

Mr.  Duxham.  It  is  the  detailed  statement  of  the  conferees  that 
I  desire  to  have  read. 

Mr   Crisp.     I  have  not  asked  to  dispense  with  the  reading  of  that. 

The  Speaker.  In  the  absence  of  objection,  the  reading  of  the  con- 
ference report  will  be  dispensed  with,  and  the  explanatory  statement  of 
the  conferees  will  be  read. 

The  Clerk  read  as  follows: 

STATEMENT   OF  CONFEREES   ON  THE   PART    OF   THE    HOUSE. 

The  House  conferees  on  the  disagreeing  votes  between  the  two  Houses  on  the  bill  of 
the  Senate  "  to  regulate  commerce,"  and  the  bill  of  the  House  "  to  regulate  commerce 
among  the  States,  and  prevent  unjust  discrimination  by  common  carriers,"  make  the  fol- 
lowing detailed  statements  of  the  changes  between  the  House  bill  and  the  substitute  here- 
with appended. 

The  action  of  the  House  being  to  adopt  a  single  amendment,  your  committee  without 
attempting  to  call  attention  to  the  precise  changes  made  in  each  section  of  the  bill,  report 
to  the  House  the  substance  and  effect  of  the  changes  made,  as  follows: 

The  bill  of  the  House  applied  only  to  the  transportation  of  freight,  and  the  bill  as 
adopted  embraces  the  transportation  of  passengers  as  well  as  freight. 

The  bill  of  the  House  was  limited  to  the  regulation  of  such  transportation  on  rail- 
roads. The  bill  as  reported  provides  for  the  regulation  of  the  transportation  of  property 
parti)'  by  railroad  and  partly  by  water,  when  both  are  used  under  a  common  control, 
management  or  arrangement,  for  a  continuous  carriage  or  shipment  from  one  State  or 
Territory  of  the  United  States,  or  the  District  of  Columbia,  to  any  other  State  or  Territory 
of  the  United  States,  or  the  District  of  Columbia. 

118 


INTER- STATE  COMMERCE    LAW.  119 

The  bill  which  we  report  defines  the  term  "railroad"  as  used  in  it,  to  include  all 
bridges,  ferries  used  or  operated  with  any  railroad,  which  is  in  addition  to  the  provisions 
of  the  House  bill. 

The  second  section  of  the  substitute  bill  adopts  substantially  the  provisions  of  the 
House  bill  against  discrimination  by  specialrates,  rebates,  drawbacks,  and  other  devices, 
and  declares  that  any  one  making  such  discrimination  shall  be  guilty  of  unjust  discrimina- 
tion, which  is  hereby  prohibited  and  declared  unlawful. 

The  third  section  of  the  substitute  embraces  substantially  the  provisions  of  the  bill  of 
the  House,  in  requiring  equal  facilities  and  advantages  for  all  shippers,  without  exception, 
and  as  a  provision  requiring  equal  facilities  for  the  interchange  of  traffic  with  all  other 
railroads  for  the  carriage  of  property  and  passengers,  and  forbids  any  discrimination  by  one 
railroad  in  the  facilities  furnished  against  an}'  other  railroad.  It  contains  a  clause  declar- 
ing that  this  act  shall  not  be  construed  as  requiring  such  common  carrier  to  give  the  use  of 
its  tracks  or  terminal  facilities  to  any  common  carrier  engaged  in  like  business. 

The  fourth  section  adopts  substantially  the  provisions  of  the  House  bill  on  the  long 
and  short  haul,  with  the  following  proviso:  That  upon  application  to  the  commission 
appointed  under  the  provisions  of  this  act  such  common  carrier  may,  in  special  cases,  after 
investigation  by  the  commission,  be  authorized  to  charge  less  for  a  longer  than  for  a  shorter 
distance  for  the  transportation  of  passengers  and  property,  and  that  the  commission  may, 
from  time  to  time,  prescribe  the  extent  to  which  such  common  carrier  may  be  relieved 
from  the  operation  of  this  section. 

The  fifth  section  of  the  substitute  bill  is  a  copy  of  the  clause  in  the  House  bill  pro- 
hibiting pooling,  with  an  amendment  striking  out  the  words  of  the  House  bill  "  by  divid- 
ing," and  inserting  in  lieu  thereof  the  words  "  or  to  divide,"  and  with  the  addition  of  the 
words  in  line  3,  after  the  word  "  combination,"  "  with  any  other  common  carrier  or  car- 
riers." 

The  sixth  section  is  a  substitute  for  the  provisions  of  the  House  and  Senate  bills  in 
relation  to  the  publication  of  schedules  showing  the  rates,  fares  and  charges  for  the  trans- 
portation of  passengers  and  property.  Instead  of  requiring  the  rates  to  be  posted  up,  as 
was  provided  in  the  House  bill,  it  requires  that,  after  ninety  days  from  the  passage  of  the 
act,  every  common  carrier  subject  to  its  provisions  shall  have  printed  and  keep  for  public 
inspection  schedules  showing  such  rates,  fares  and  charges,  and,  in  addition  to  requiring 
the  railroads  to  give  publicity  at  all  of  the  depots  on  their  several  lines,  it  gives  authority 
to  the  commission,  where  it  is  proper  and  necessary  to  require  them  to  give  publicity  to 
their  rates  to  other  places  beyond  the  lines  of  their  several  railroads. 

It  also  provides  that  the  rates,  fares  and  charges  shall  not  be  raised  except  after 
ten  days  of  public  notice,  but  that  they  may  be  reduced  without  previous  public 
notice ;  the  notice,  however,  shall  be  simultaneous  with  the  reduction  itself,  and 
it  requires  that  all  common  carriers  subject  to  the  provisions  of  this  act  shall  file 
with  the  commission  provided  for  in  the  bill,  copies  of  the  schedules  which  have  been 
established,  and  shall  promptly  notify  said  commission  of  all  changes  made  in  the  same  ; 
and  that  they  shall  file  with  the  commission  copies  of  all  contracts,  arrangements  or  agree- 
ments with  other  common  carriers  in  relation  to  traffic  affected  by  the  provisions  of  this 
bill ;  and  in  cases  where  passengers  and  freights  pass  over  continuous  lines  or  routes 
operated  by  more  than  one  common  carrier,  and  the  several  common  carriers  operating 
such  lines  or  routes  establish  joint  tariffs  of  rates  or  fares  or  charges  of  such  continuous 
lines  or  routes,  copies  of  such  joint  tariffs  shall  also  be  filed  with  the  commission,  and 
made  public,  if  sodirected  by  the  commission. 

The  section  also  provides  that  where  a  common  carrier  subject  to  its  provisions  shall 
neglect  or  refuse  to  file  or  publish  its  schedules  of  tariff  or  rates  and  fares,  or  any  part  of 
the  same,  such  common  carrier  shall,  in  addition  to  the  penalties  herein  prescribed,  be  sub- 
ject to  a  writ  of  mandamus,  to  be  issued  by  any  circuit  court  of  the  United  States,  in  any 
judicial  district  wherein  the  principal  office  of  the  common  carrier  is  situated,  or  wherein 
such  offense  may  be  committed,  requiring  the  compliance  witht  he  provisions  of  the  act. 

The  seventh  section  of  the  substitute  bill  contains  substantially  the  provisions  of  the 
first  part  of  the  second  section  of  the  House  biil,  in  relation  to  the  continuous  carriage  of 
property  and  persons  from  the  place  of  shipment  to  the  place  of  destination. 

The  eighth  section  of  the  substitute  bill  contains  the  substance  of  the  seventh  section 
of  the  House  bill,  in  regard  to  damages  and  counsel's  fees,  but  expressed  in  somewhat 
different  language. 

The  ninth  section  of  the  substitute  bill  is  a  new  section,  which  provides  that  persons 
claiming  to  have  been  damaged  by  the  action  of  common  carriers  may  proceed  for  recovery 
of  their  damages  either  in  the  courts  of  the  United  States  or  before  the  commission  herein 
provided  for,  as  they  may  elect,  but  not  before  both  tribunals.  This  section,  which  gives 
jurisdiction  to  courts  of  the  United  States,  does  not  give  jurisdiction  in  civil  suits  to  the 
State  courts  as  was  provided  for  in  the  House  bill. 

This  section  of  the   substitute  bill  also  provides  that  the  courts  shail   have  power  to 


120  INTER -STATE    COMMERCE    LAW. 

compel  any  director,  officer,  receiver,  trustee,  or  agent  of  the  corporation  or  company- 
defendant  in  such  suit,  to  attend,  appear  and  testify  in  such  case  ;  and  may  compel  the 
production  of  the  books  and  papers  of  snch  corporation  or  company  party  to  any  such  suit; 
and  it  provides  further  that  the  claim  that  any  such  testimony  or  evidence  may  tend  to 
criminate  the  person  giving  such  evidence,  shall  not  excuse  such  witness  from  testifying; 
but  that  such  evidence  or  testimony  shall  not  be  used  against  such  person  on  the 
trial  of  any  criminal  proceeding. 

The  tenth  section  of  the  substitute  bill  makes  it  a  penal  offense  to  violate  any  of  the 
provisions  of  this  act,  and  is  substantially  the  eighth  section  of  the  House  bill,  except  that 
it  puts  the  maximum  of  the  fine  which  may  be  imposed  at  the  sum  of  $5,000  instead  of 
$2,000,  as  was  provided  for  by  the  House  bill. 

The  eleventh  and  subsequent  sections  to  the  twenty-first,  inclusive  of  the  substitute 
bill,  contain  the  substance  of  the  Senate's  bill  providing  for  a  commission,  except  as  modi- 
fied by  the  provisions  of  the  substitute  bill  herein  recited 

It  provides  for  a  commission  to  consist  of  five  persons  whose  term  of  office  shall  be  for 
six  years,  except  for  the  first  appointments,  which  are  to  be  for  two,  three,  four,  five  and 
six  years.  The  members  of  this  commission  are  to  be  appointed  by  the  President,  by  and 
with  the  advice  of  the  Senate.  Their  principal  office  shall  be  in  Washington,  but  they 
may  hold  sessions  at  other  places  than  Washington,  and  a  single  member  of  the  commis. 
sion  may  take  testimomy  any  where,  as  may  be  directed  by  the  commission. 

These  commissioners  have  salaries  of  $7,500  each.  The  commission  has  the  power  to 
appoint  a  secretary  with  an  annual  salary  of  $3,500,  and  has  authority  to  employ  and  fix 
the  compensation  of  such  other  employees  as  it  may  find  necessary  to  the  proper  perform- 
ance of  its  duties,  subject  to  the  approval  of  the  Secretary  of  the  Interior. 

The  nineteenth  section  of  the  Senate's  bill,  providing  for  a  reference  of  the  question 
of  pooling  to  the  commission,  is  not  embraced  in  this  substitute. 

Section  22  of  the  substitute  bill,  among  other  things,  provides  that  nothing  in  this  act 
contained  shall  in  any  way  abridge  or  alter  the  remedies  now  existing  at  common  law  or 
by  statute,  but  that  the  previsions  of  this  act  are  in  addition  to  such  remedies,  with  a  pro- 
viso that  no  pending  litigation  shall  in  any  way  be  affected  by  this  act. 

Section  24  of  the  substitute  bill  provides  that  the  act  shall  go  into  effect  sixty  days 
after  its  passage,  as  in  the  opinion  of  your  committee  it  was  deemed  best  to  give  the  rail- 
roads sufficient  time  to  prepare  their  schedules  and  to  modify  iheir  management  in  accord- 
ance with  the  provisions  of  this  bill.  The  appointment  of  the  commission,  howevei,  is  to 
be  made  at  once,  as  it  has  to  be  organized,  and  as  said  schedules  oi  rates  and  charges  have 
to  be  filed  with  said  commission. 

J.  H.  REAGAN. 
CHARLES  F.  CRISP. 
A.  J.  WEAVER. 
Managers  on  the  part  0/  the  House. 

Mr.  Crisp.  Mr.  Speaker,  I  propose  now  to  explain  somewhat  the 
provisions  of  this  bill,  and  the  action  of  the  managers  who  represented 
the  House  in  the  conference.  I  am  not  informed  as  to  the  disposition  of 
the  House  with  regard  to  debating  this  report,  If  it  were  possible  to  have 
now  any  understanding  looking  to  the  fixing  of  such  early  time  for  a 
vote  on  this  question  as  may  be  consistent  with  a  proper  discussion  of  so 
important  a  measure,  I  should  be  very  glad  indeed. 

Mr.  Weaver,  of  Iowa.  I  think  it  best  the  debate  should  be  per- 
mitted to  run  on  awhile,  before  attempting  at  all  to  limit  it, 

Mr.  Dunham.  After  the  debate  has  proceeded  for  a  time,  we  can 
then  better  see  what  limit  should  be  fixed.  Two  hours  hence  we  can  tell 
better  than  we  can  now  when  we  desire  the  debate  to  stop. 

Mr.  O'Neill,  of  Pennsylvania.  The  Senate  occupied  nearly  two 
weeks  in  the  discussion  of  this  report. 

Mr.  Crisp.  Mr.  Speaker,  in  view  of  the  suggestions  of  gentlemen, 
I  shall  not  at  this  time  undertake  to  secure  any  limitation  of  the  debate 
on  this  question. 

For  many  years  attention  has  been  directed  to  the  practices  of  com- 
mon carriers,  transporters  of  commerce  from  State  to  State — practices 


INTER -STATE    COMMERCE    LAW.  121 

which  have  been  generally  understood  and  believed  to  be  unjust  to  the 
public.  Year  after  year  the  agitation  of  the  question  of  regulating  such 
commerce  has  been  brought  to  the  attention  of  the  Representatives  of 
the  people.  At  the  last  session  of  this  Congress,  this  House,  by  a  very 
large  majority,  passed  a  bill  known  as  "the  Reagan  bill,"  the  purpose  and 
intent  of  which  was  to  protect  the  people  from  unjust  charges  by  com- 
mon carriers  engaged  in  interstate  commerce. 

At  the  last  session  also,  the  Senate  of  the  United  States  passed  a  bill 
known  as  "the  Cullom  bill,"  having  for  its  object  the  regulation  of  the 
carriage  of  commerce  between  the  States.  These  bills  were  dissimilar;  they 
brought  about  a  disagreement  between  the  two  Houses  upon  a  question, 
which,  as  the  votes  of  the  two  Houses  clearly  indicated,  each  House  was 
anxious  to  adjust  satisfactorily.  In  that  state  of  the  case  a  conference 
committee,  consisting  of  three  members  of  each  House,  was  appointed; 
and  those  conferees,  before  the  assembling  of  the  present  session,  met  in 
the  Capitol  and  made  an  earnest  effort  to  agree  upon  a  plan  which  would 
afford  some  relief  to  the  people  of  the  United  States.  I  need  not  say 
that,  representing  in  a  controversy  of  this  kind  views  so  different  as  those 
which  had  been  expressed  by  the  two  Houses,  the  conferees  on  the  one  part 
and  on  the  other  had  to  yield  something  of  their  convictions  as  to  what 
ought  to  be  done.  The  result  of  those  labors  is  presented  in  the  pending 
report. 

I  feel,  as  one  of  the  conferees  on  the  part  of  the  House,  the  only  one 
of  them  now  present,  that  an  explanation  should  be  made  of  this  bill.  I 
feel  you  ought  to  be  told  as  to  what  we  understand  to  be  the  meaning  of 
any  part  of  this  bill  any  gentleman  wants  to  inquire  about,  and  I  feel 
you  ought  to  be  informed  that  the  bill  as  presented  is  the  result  of  a  com- 
promise made  between  individuals  or  Representatives  in  Congress  who 
earnestly  desire  to  afford  some  relief  to  the  people  of  the  United  States. 

I  shall  not,  Mr.  Speaker,  at  this  late  day,  in  the  discussion  of  this 
great  question,  undertake  to  present  to  this  House  all  the  reasons  that 
exist  why  legislation  should  be  had  on  this  subject.  I  take  it  for  granted 
that  every  man  in  the  House  who  regards  railroading  as  a  business  in 
which  the  public  has  an  interest,  understands  and  concedes  that  some 
regulation,  some  provision,  some  law  is  necessary  to  protect  the  people 
against  the  practices  on  the  part  of  railroads,  which  have  so  unjustly  bur- 
dened the  great  body  of  shippers,  and  occasioned  a  demand  for  legislation 
from  every  State  in  the  Union. 

In  the  arguments  made  by  the  representatives  of  these  corporations 
as  a  reason  why  legislation  should  not  be  had,  in  my  judgment,  Mr. 
Speaker,  the  error  lies  in  the  fact  that  they  fail  to  recognize  the  charac- 
ter of  the  corporation  which  they  represent.  They  come  before  the 
committees  of  the  House,  they  go  before  the  country  making  an  argu- 
ment in  vindication  of  their  practices,  which  might  be,  in  many  cases, 
forcible  if  they  were  talking  about  a  private  business,  if  they  were 
talking  about  a  business  in  which  the  public  had  not  an  interest,  if  they 
were  talking  about  a  business  which  could  exist  without  the  consent  of 
the  Government,  If  we  will  bring  our  minds  to  a  recognition  of  the 
fact— because  there  we  must  at  last  come — that  a  railroad  company  is  a 
corporation  created  by  the  public,  for  the  benefit  of  the  public,  that 
while  the  corporators  and  owners  of  the  franchise  have  a  right  to  charge 


122  INTER -STATE    COMMERCE    LAW. 

reasonable  tolls,  they  take  that  right  burdened  with  obligations  to  the 
public  which  are  of  paramount  importance  and  which  can  not  be  disre- 
garded. 

A  railroad  can  not  be  built  in  any  State  in  this  Union  except  by  the 
exercise,  on  the  part  of  such  State,  of  the  right  of  eminent  domain. 
The  State  can  exercise  that  right  in  no  case  except  for  the  public  good— 
for  the  public  use.  No  State  and  no  power  can  take  from  an  individual 
property  which  he  owns  and  give  it  to  another.  It  can  be  taken  by 
the  State  for  only  one  purpose — for  public  use— and  then  only  on  just 
compensation. 

These  companies  are  chartered  by  the  State,  or  by  the  United  States. 
The  power  that  grants  a  charter  grants  it,  although  it  may  not  be  so 
nominated  in  the  charter,  for  the  public  good. 

Therefore  it  is,  Mr.  Speaker,  the  people  have  rights  in  regard 
to  these  corporations  and  great  transportation  agencies  which  they  would 
not  have  if  it  were  a  business  conducted  by  a  private  individual. 

The  error,  therefore,  I  say,  in  the  arguments  presented  to  sustain 
the  present  practices  arises  from  a  misconception  of  the  character  of 
these  corporations.  And  I  mention  that  now  so  the  House  and  each 
member  may  bear  in  mind  in  what  we  propose  to  do  we  are  dealing  with 
a  corporation  or  corporations  in  which  the  public  interest  is  paramount. 
And  while  we  do  not  seek,  and  should  not  seek,  to  deprive  investors  of 
reasonable  returns  for  their  investments,  if  the  public  interest  demands  it 
private  interest  must  give  way. 

Now,  Mr.  Speaker,  having  called  the  attention  of  the  House  to  that 
fundamental  principle,  which  I  believe  is  not  now  disputed,  I  propose  to 
invite  attention  to  the  provisions  of  the  bill,  or  some  of  them,  which  we 
suggest  for  consideration.  In  many  of  the  provisions  of  this  bill,  I  un- 
derstand, we  all  agree.  Those  provisions  of  this  bill,  which  seek  to 
enforce  equality  between  the  shippers,  I  understand  nobody  objects  to. 
The  bill  provides  that  no  preference  shall  be  given  to  one  shipper  over 
another,  and  that  no  drawback,  or  rebate,  or  device  shall  be  authorized 
or  permitted  which  allows  discrimination  in  favor  of  one  shipper  against 
another ;  that  no  practice  shall  be  tolerated  which  permits  discrimination 
for  or  against  a  particular  locality,  that  no  practice  shall  be  allowed 
which  permits  a  railroad  company  to  discriminate  for  or  against  a  con- 
necting railroad  or  other  railroad  company  which  may  receive  or  want 
to  receive  freight  from  the  railroad  company  so  carrying.  The  act  also 
provides  that  all  rates  charged  by  the  common  carrier  engaged  in  inter- 
state commerce  shall  be  reasonable  and  just. 

Those  provisions,  Mr.  Speaker,  I  understand  meet  the  approbation 
of  all.  Those  provisions,  like  some  other  provisions  in  this  bill,  to  which  I 
shall  refer,  are  the  provisions,  as  I  understand  it  to-day,  of  the  common 
law  of  the  land  where  we  live.  I  understandjthat  each  one  of  these  provi- 
sions is  maintained  by  the  common  law  ;  and  therefore  there  should  be 
and  can  be  no  reason,  I  submit,  why  any  member  should  object  to  this 
portion  of  the  bill. 

The  next  point  to  which  I  shall  refer,  and  which  has  excited  some 
controversy,  one  perhaps  which  has  received  more  attention  in  the  public 
discussions  and  in  the  public  press  on  this  measure  than  any  other  sec- 
tion, is  the  fourth,  that  referring  to  what  is  commonly  called  the  long 


ifrTER-  STATE    COMMERCE    LAW.  123 

and  short  haul.    I  will  ask  the  Clerk  to  read  the  fourth  section  of  the 
bill,  as  amended. 

The  Clerk  read  as  follows: 

Sec.  4.  That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the  provisions  of 
this  act  to  charge  or  receive  any  greater  compensation  in  the  aggregate  for  the  transporta- 
tion of  passengers  or  of  like  kind  of  property,  under  substantially  similar  circumstances 
and  conditions,  for  a  shorter  than  for  a  longer  distance  over  the  same  line  in  the  same 
direction,  the  shorter  being  included  in  the  longer  distance;  but  this  shall  not  be  con- 
strued as  authorizing  any  common  carrier  within  the  terms  of  this  act  to  charge  and  receive 
as  great  compensation  for  a  shorter  as  for  a  longer  distance;  Provided,  however,  That 
upon  application  to  the  commission  appointed  under  the  provisions  of  this  act,  such  com- 
mon carrier  may,  in  special  cases,  after  investigation  by  the  commission,  be  authorized  to 
charge  less  for  longer  than  for  shorter  distances  for  the  transportation  of  passengers  or 
property;  and  the  commission  may  from  time  to  time  prescribe  the  extent  to  which  such 
designated  common  carrier  may  be  relieved  from  the  operation  of  this  section  of  this  act. 

Mr.  Crisp.  That  section,  Mr.  Speaker,  as  I  have  said,  has  given 
rise  to  a  great  deal  of  controversy,  and  I  feel  it  incumbent  upon  me  to 
present  to  the  House  in  the  utmost  candor  my  view  of  its  meaning.  Of 
course,  I  do  not  presume  to  say  that  my  view  of  it  is  the  absolutely  cor- 
rect one,  but  I  can  state  what  I  believe  it  to  mean.  I  can  state  what  I 
intended  it  to  mean  when  I  gave  my  assent  to  the  placing  of  it  in  this 
bill. 

The  great  object  the  committee  had  in  view  was  to  say  that  by  law 
a  transportation  company  should  not  charge  unreasonable  rates,  and 
should  not  discriminate  against  individuals  or  places.  We  believe,  or  I 
believe,  that  the  principle  upon  which  the  rates  should  be  fixed  in  the 
transportation  business  is  the  cost  to  the  company  of  transporting  the 
goods,  the  cost  of  their  plant,  the  value  of  their  line,  the  cost  of  term- 
inal facilities,  etc.,  with  allowance  for  a  reasonable  profit  on  the  invest- 
ment. 

I  do  not  believe,  sir,  that  extraneous  circumstances  ought  to  affect 
the  _  question  of  charges.  I  do  not  believe,  Mr.  Speaker,  that  it  is  any 
business  of  the  transportation  company  where  goods  come  from  that  are 
to  be  shipped  over  their  line,  any  more  than  I  believe  it  is  their  business 
to  know  where  the  goods  go  after  passing  from  their  line.  I  believe  that 
their  legitimate  business  is  the  transportation,  for  reasonable  rates,  of 
such  freights  as  may  be  given  to  them  by  any  individual  or  by  other  cor- 
porations for  transportation. 

Believing  such  to  be  the  case,  my  understanding  of  this  section  is 
that  the  purpose  is  to  bring  about  reasonable  rates  without  discrimina- 
tion ;  and  under  this  section  the  amount  charged  by  a  railroad  engaged 
in  interstate  commerce  for  transporting  freight  over  its  entire  line  is  the 
maximum  rate  that  may  be  charged  for  transporting  freight  over  a  part 
of  it  only,  the  freight  and  the  circumstances  being  substantially  similar. 
I  do  not  mean  to  say,  nor  does  the  bill  say,  that  it  would  be  reasonable 
and  just  to  charge"  as  much  for  the  short  as  for  the  long  haul,  but  it 
does  say  under  the  general  rule  that  more  shall  not  be  charged.  I  do 
not  understand  that  the  word  "  line  "  as  used  in  that  section  means  any- 
thing different  from  road  as  defined  in  the  bill : 

Theterm  "  railroad  "  as  used  in  this  act  shall  include  all  bridges  and  ferries  used  or 
operated  in  connection  with  any  railroad,  and  also  all  the  road  in  use  by  any  corporation 
operating  a  railroad,  whether  owned  or  operated  under  a  contract,  agreement,  or  lease. 

Mr.  Butterworth.     I  do  not  want  to  anticipate  the  argument  of 


124  INTER-  STATE    COMMERCE    LAW. 

my  friend,  but  I  trust  that  lie  will  at  this  point  explain  what  is  meant  by 
the  words  "substantially  similar  circumstances  and  conditions,"  and 
give  an  illustration  of  what  he  understands  by  similar  conditions  and 
circumstances  and  those  which  are  dissimilar,  and  which  will  authorize 
a  change  in  rates.  Of  course  he  knows  that  we  can  learn  more  readily 
by  illustration  than  by  precept. 

Mr.  Crisp.  The  gentleman  has  not  given  me  a  very  easy  task. 
The  provision  we  make  is  that  where  the  circumstances  are  substantially 
similar  the  shorter  haul  shall  not  be  charged  more  than  the  greater.  I 
can  not  undertake  in  a  debate  like  this  to  determine  for  the  gentleman 
exactly  what  would  constitute  "substantially  similar  circumstances." 
That  would  be  a  matter  into  which  I  could  not  now  enter  ;  and  I  sub- 
mit it  is  hardly  fair  to  ask  me  to  define  ' '  substantially  similar  circum- 
stances "  as  used  in  the  bill. 

Mr.  Long.  But  is  it  not  necessarily  what  a  judge  would  have  to 
do  in  instructing  a  jury  ? 

Mr.  Btjtterworth.  That  is  the  point ;  for  if  my  friend  was  a 
commissioner  he  would  have  to  define  it. 

Mr.  Crisp.  If  complaint  is  made  to  the  commission  of  the  viola- 
tion of  the  rule  prescribed  in  the  fourth  section  of  this  bill,  the  commis- 
sion, after  hearing  both  sides,  would  determine  in  the  particular  case 
made  whether  or  not  the  complaint  was  well  founded.  Necessarily  in 
deciding  that  question  the}'  would  determine  whether  or  not  the  circum- 
stances were  substantially  similar  in  the  case  of  the  long  haul  and  in  the 
case  of  the  short  haul  presented  in  the  complaint.  That  is  the  object 
and  purpose  of  the  commission  in  that  regard.  If  the  individual  did 
not  go  to  the  commission,  but  went  to  the  courts,  then,  Mr.  Speaker,  the 
courts,  the  judge,  and  the  jury  would  determine  that  question.  I  am 
not  prepared,  sir,  to  say,  in  answer  to  the  suggestion  of  my  friend  from 
Massachusetts,  Governor  Long,  that  the  court  would  tell  the  jury  what 
"substantially  similar  circumstances"  meant. 

Mr.  Long.  No;  but  the  judge  would  have  to  tell  the  jury  what  the 
legal  effect  of  the  words  is. 

Mr.  Crisp.  I  think  the  judge  would  say  to  the  jury,  after  hearing  all 
the  evidence,  that  if  they  believed  more  had  been  charged  for  the  short 
than  for  the  long  haul  of  like  kind  of  property  under  substantially  similar 
circumstances  and  conditions,  then  they  should  find  for  the  complainants, 
leaving  the  jury  to  determine  in  each  case  whether  the  property  was  of 
like  kind  and  and  whether  the  circumstances  and  conditions  were  sub- 
stantial^ similar. 

Mr.  Scott.  There  is  a  line  of  railroad  known  as  the  New  York  Cen- 
tral Railroad,  extending  from  Buffalo  to  the  city  of  New  York,  entirely 
within  the  jurisdiction  of  the  State  of  New  York,  and  all  rates  made 
from  Buffalo  to  the  city  of  New  York  would  not  come  under  this  bill. 
This  bill  cannot  the  rates  of  that  railroad.  Then  there  is  what  is  known 
as  the  great  chain  of  lakes,  extending  from  Buffalo  to  Chicago,  entirely 
open  to  the  competition  of  every  vessel  and  every  vessel-owner,  compet- 
ing for  the  great  trade  of  the  Northwest.  When  that  trade  is  brought 
from  Duluth  and  from  Chicago,  and  delivered  at  the  port  of  Buffalo,  it 
immediately  becomes  State  commerce,  and  is  not  then  within  the  juris- 
diction of  your  bill. 


INTER -STATE    COMMERCE    LAW.  125 

There  is  another  line  of  railroad  inland  extending  from  the  city  of 
Chicago,  and  known  as  the  Pennsylvania  railroad  system,  being  the 
Pennsylvania  railroad  from  the  city  of  Philadelphia  to  the  city  of  Pitts- 
burgh, and  there  connecting  with  a  line  controlled  by  and  known  as  the 
Pitt-burgh,  Fort  Wayne  and  Chicago  Railroad,  extending  to  the  city  of 
Chicago.  And  all  the  trans-continental  commerce  consequently  carried 
by  that  system  of  road  has  to  be  carried  inland.  How  can  you,  there- 
fore, possibly,  under  the  provisions  of  your  bill,  treat  equitably  and 
fairly  these  two  great  systems  of  transcontinental  roads  when  the  com- 
petitive traffic  is  delivered  by  lake  at  Buffalo  coming  in  under  the  juris- 
diction of  New  York  State,  and  the  inland  line  running  from  Chicago  to 
the  city  of  Xew  York,  which  comes  in  under  your  bill  becomes  subject 
to  the  prohibitory  provisions  that  they  shall  not  do  so  and  so? 

Mr.  Crisp.  The  Congress  of  the  United  States  have  no  authority 
under  the  Constitution  to  regulate  the  transportation  of  commerce  wholly 
within  a  State.  The  States  of  the  American  Union  under  the  Constitu- 
tion have  no  right  to  regulate  the  transportation  of  commerce  between 
the  States.     The  line  is  clearly  marked. 

The  question  of  my  friend  from  Pennsylvania  [Mr.  Scott]  involves 
the  idea  that  because  we  can  not  regulate  the  transportation  of  commerce 
within  the  State  of  Xew  York  we  shall  not  therefore  regulate  the  trans- 
portation of  commerce  between  the  States.  See,  Mr.  Speaker,  the  posi- 
tion in  which  that  would  leave,  and  I  might  say  has  left,  the  American 
people  for  many  years.  Until  quite  recently,  sir,  there  were  many  be- 
lievers in  the  policy  of  railway  regulation  who  insisted  that  the  true 
method  was  to  leave  to  each  State  the  regulation  of  transportation 
through  and  over  its  territory,  and  you  found  men  who  recognized  the 
necessity  for  legislation,  but  felt  that  it  was  a  dangerous  step  for  Con- 
gress to  take  and  insisted  that  the  States  should  legislate  for  the  regula- 
tion of  each  line  within  its  borders. 

The  Supreme  Court  of  the  United  States  before  whose  decisions  we 
all  must  bow,  have  decided  that  commerce,  interstate  commerce,  com- 
merce passing  from  one  State  into  or  through  another,  could  not  be  regu- 
lated, nor  could  the  carriage  of  it  be  regulated  by  the  State  law.  If, 
therefore,  we  are  to  wait  before  we  discharge  our  duty  under  the  Consti- 
tution to  the  people  until  the  State  of  JSew  York,  or  the  State  of  Massa- 
chusetts, or  any  other  State  discharges  its  duty,  in  the  mean  time  I  ask 
you  who  is  to  protect  the  great  body  of  the  people  from  the  aggression 
of  these  vast  monopolies?  All  that  we  can  do  in  this  case  or  in  any  other 
is  to  discharge  our  duty  under  the  law;  to  take  no  step  that  will  impair 
the  right  of  the  States,  but  to  leave  undone  nothing  that  we  can  consti- 
tutionally do  that  will  aid  the  people  to  just  and  reasonable  rates  of  trans- 
portation of  person  or  property  between  the  States. 

If  the  evil  suggested  by  the  gentleman  from  Pennsylvania  exists, 
then  when  we  discharge  our  dut}^  I  think  we  can  confidently  rely  upon 
the  people  of  that  great  State  to  discharge  theirs. 

Mr.  Xelsox.  I  desire  to  suggest  to  the  gentleman  from  Georgia 
this:  Whether  or  no  the  question  propounded  by  the  gentleman  from 
Pennsylvania  was  not  rather  in  the  nature  of  a  suggestion  how  it  was 
possible  to  evade  the  provisions  of  this  bill,  than  anything  else? 

Mr.  Crisp.     I  was  answering  the  suggestion  of  my   friend   from 


126  INTER -STATE    COMMERCE    LAW. 

Pennsylvania  because  I  understood  him  to  mean  by  the  case  that  he 
cited,  that  because  perhaps  the  railroad  wholly  "within  the  State  of  New 
York  could  not  be  required  by  this  act  to  do  or  leave  undone  anything, 
its  passage  would  be  unjust  to  other  railroads  competing  for  the  same 
business  who  would  be  controlled  by  our  legislation.  Therefore,  it  is 
that  I  am  making  the  suggestion  I  do. 

Mr.  Butter  worth.  Does  the  fact  that  there  is  water  competition 
along  a  part  of  the  line  and  not  along  the  whole  line  change  the  condi- 
tion within  the  terms  of  this  act?  In  other  words,  suppose  from  A  to  C 
there  is  water  competition,  and  in  order  to  obtain  the  freight,  a  certain 
rate,  about  that  which  should  be  charged  for  transportation  by  water, 
were  charged  suppose  from  A  to  B,  B  being  between  A  and  C,  but 
nearer  C,  there  being  no  water  competition  between  B  and  C — would 
you  say  the  circumstances  and  conditions  touching  the  shipments  to  the 
two  points  B  and  C  were  substantially  the  same,  and  hence  that  the  car- 
rier would  not  be  authorized  to  charge  an  increased  rate  to  C? 

Mr.  Beoim.     Is  not  that  rather  a  question  of  construction? 

Mr.  Crisp.  I  will  say,  because  I  do  not  wish  to  conceal  any  opinion 
I  entertain  on  any  provision  of  the  bill,  that  in  my  judgment  the  fact 
that  there  was  competition  there  does  not  affect  the  question. 

Mr.  Butterworth.  Then  my  friend  will  agree  that  the  long  haul 
is  practically  abolished  as  between  A  and  C? 

Mr.  Anderson,  of  Kansas.     Oh,  no. 

Mr.  Crisp. — Mr.  Speaker,  while  I  agree  with  the  gentleman  from 
Ohio  [Mr.  Butterworth]  as  to  the  meaning  of  that  provision,  I  can 
not  agree  in  his  suggestion  that  the  long  haul  is  abolished.  Why,  sir, 
within  the  margin  provided  by  the  bill,  see  the  advantage  that  the  long 
haul  has.  It  must  be  remembered  that  there  is  no  attempt  in  this  bill  to 
require  any  transportation  company  to  make  a  pro  rata  or  so  much  per 
mile  charge. 

So  far  as  the  restriction  in  the  fourth  section  of  the  bill  is  concerned, 
they  may  charge  as  much  for  the  short  as  for  the  long  haul.  Now  let 
me  answer  the  gentleman's  question  upon  the  idea  that  these  railroads 
are  common  carriers  established  for  the  benefit  of  the  public.  Here  is  a 
line  of  railroad  from  New  York  to  New  Orleans,  made  up  of  connecting 
lines.  At  New  Orleans  there  is  a  water  transportation,  as  there  is  at 
New  York,  That  line  of  railroads  will  haul  freight  from  New  York  to 
New  Orleans  for  about  76  cents  a  hundred,  while  to  Atlanta,  which  is 
about  half  way  or  a  little  more,  the  charge  is  $1  a  hundred.  Goods  that 
go  from  New  York  to  New  Orleans  by  rail  go  through  Atlanta  and 
nearly  as  far  again  as  they  went  in  reaching  Atlanta,  and  when  they  get 
to  New  Orleans  they  pay  76  cents  a  hundred;  whereas,  if  they  had 
stopped  at  Atlanta  and  saved  nearly  half  the  haul  they  would  have  had 
to  pay  $1  a  hundred. 

Mr.  Butterworth.  Now,  if  the  gentleman  will  indulge  me  right 
there,  I  will  not  interrupt  him  again.  He  will  concede  that  the  charge  to 
New  Orleans  is  based  upon  the  competition  with  water — that,  because  of 
that  competition,  the  railroad  companies  can  not  charge  and  receive  a 
higher  rate^  Now,  since  they  must  charge  that  low  rate  which  they  do 
charge  to  New  Orleans  in  order  to  secure  the  business,  I  ask  the  gentle- 
man to  explain  to  the  House  how  it  will  benefit  Atlanta  to  cut  off  that 


INTER -STATE    COMMERCE    LAW.  127 

long-haul  rate  from  New  York  to  New  Orleans?  He  will  bear  in  mind 
that  it  is  impossible  for  them  to  get  the  freight  for  New  Orleans  at  all 
unless  they  charge  such  a  rate  as  will  enable  them  to  compete  with  water 
transportation.  If  that  business  is  lost  to  the  railroad  companies  because 
they  are  not  allowed  to  charge  the  lower  rate  to  New  Orleans  for  the 
reason  that  they  can  not  reduce  the  rate  to  Atlanta,  will  the  gentleman 
explain  how  Atlanta  will  be  benefited? 

Mr.  Anderson,  of  Kansas.    But  your  assumptions  are  not  correct. 
Mr.  Butterworth.     They  are  correct. 

Mr.  Crisp.     Atlanta,  I  take  it  for  granted,  is  entitled  in  the  case  sug- 
gested to  reasonable  rates.     What  is  or  what  is  not  a  reasonable  rate  is  a 
question  of  fact,  which  must  be  settled  by  what? 
Mr.  Butterworth.     B}t  all  the  circumstances. 
Mr,  Crisp.     By  the  question  of  competition,  or  by  the  question  of 
cost  ? 

Mr.  Butterworth.  Competition  is  one  of  the  circumstances,  of 
course  When  a  road  is  built  the  probability  of  competition  is  one  of  the 
circumstances  to  be  considered,  because  it  will  get  no  freight  unless  it 
can  carry  as  cheaply  as  its  competitors. 

Mr.  Crisp.  I  suggest  to  my  friend  that  right  there,  in  my  humble 
judgment,  is  one  great  error  which  is  made  by  the  transportation  com- 
panies. They  lose  sight  of  the  business  for  which  they  were  organized. 
The  gentleman  says  that  if  the  railroads  do  not  haul  at  such  a  price  from 
New  York  to  New  Orleans  they  can  not  get  any  business.  They  ought 
not  to  have  any  business  unless  they  can  make  a,  reasonable  profit  upon 
it,  and  if  the  reduced  rate  of  76  cents  between  New  York  and  New  Or- 
leans pays  a  reasonable  profit,  what,  kind  of  a  profit,  I  ask  you,  does  the 
dollar  rate  from  Atlanta  to  New  York  pay,  the  distance  being  only  about 
half  as  great? 

Mr.  Anderson,  of  Kansas.  Why,  it  amounts  to  larceny !  [Laugh- 
ter.] 

Mr.  Crisp.  But  if  they  make  no  money  by  doing  business  at  the 
lower  rate  between  New  York  and  New  Orleans,  then  there  is  a  double 
burden  upon  the  intermediate  points  along  the  line,  because  they  are 
taxed  to  make  up  what  has  been  lost  upon  the  through  transportation. 
So  at  last,  my  friend  from  Ohio,  it  is  a  question  of  the  reasonableness  of 
the  rate. 

Mr.  Butterworth.  Certainly,  all  things  considered. 
Mr.  Crisp.  Under  the  fourth 'section  of  this  bill  discrimination  can 
be  made  to  this  extent,  that  the  railroad  company  may  charge  as  much 
for  the  short  haul  as  for  the  long  haul.  Let  the  question  be  addressed  to 
any  man  of  ordinary  understanding  like  myself:  Is  it  reasonable  and 
just  that  a  corporation  which  owes  its  existence  to  the  public,  and  is 
bound  to  exercise  its  franchises  for  the  benefit  of  the  public,  shall  take  an 
article  of  freight  in  the  city  of  New  York,  and  if  it  delivers  that  article 
at  a  distance  of  500  miles  from  New  York  shall  receive  a  dollar  for  car- 
rying it,  but  if  it  carries  it  500  miles  farther  shall  receive  75  cents?  What 
must  be  the  answer?  Does  that  strike  any  gentleman  as  a  reasonable  and 
fair  business  proposition. 

_  Mr.  Butterworth.  My  friend  knows  very  well  that  to  get  the 
freight  at  all  to  a  given  point  the  railroads  must  compete  with  their  com- 
petitors.    That  is  true,  is  it  not  ? 


128  INTER -STATE    COMMERCE    LAW. 

Mr.  Crisp.     Undoubtedly. 

3Ir.  Butter  worth.  Now,  if  competing  rates  do  not  pay  any 
profit,  but  barely  the  cost  of  the  transportation,  must  the  railroads  turn 
that  business  away?  If  not,  if  they  are  allowed  to  cany  if,  it  certainly 
helps  to  pay  expenses,  and  thereby,  to  some  extent,  takes  the  burden  off 
the  short  haul.  Just  how  the  public  is  injured  by  that  is  what  I  ask  the 
gentleman  to  explain. 

Here  is  a  little  town,  if  you  please,  twenty  miles  from  this  city  where 
the  people  have  been  accustomed  to  pay  6  cents  a  bushel  for  hauling  all 
their  coal.  A  railroad  company  builds  a  line  passing  that  town  and  ex- 
tending to  some  point  beyond,  where  there  is  water  competition.  The 
railroad  company  sa%ys  to  the  people  at  this  intermediate  point,  "What 
has  it  been  your  custom  to  pay  for  hauling  your  coal?"  The  answer  is 
"  6  cents  a  bushel."  The  company  says,  "  We  will  haul  it  for  3  cents  a 
bushel;  but  to  the  point  beyond,  at  which  there  is  competition,  we  must 
haul  it  for  2  cents  a  bushel,  because  our  competitor  will  haul  it  for  that 
price."  Now,  does  it  injure  the  people  who  previously  have  paid  6  cents 
a  bushel  to  get  their  coal  hauled  at  3  cents?  If  it  does,  how  does  it  in- 
jure them? 

Mr.  Crisp.  That,  Mr.  Speaker,  is  a  plausible  statement.  It  is  how- 
ever, based  upon  the  inquiry,  which  I  think  an  erroneous  test,  "  What  is 
the  work  worth  to  the  shipper?"  I  maintain  the  question  should  be, 
"What  does  it  cost  the  transporter?"  That  is  the  difference  between 
the  proposition  made  by  the  gentlemen  here  and  that  insisted  upon  by 
this  committee.  You  ask,  "  what  are  certain  services  worth  to  the  ship- 
pers? "  What  is  it  worth  to  the  man  halting  along  the  highway  to  meet 
a  conveyance  which  will  carry  him  out  of  the  storm  and  darkness  to  a 
place  of  shelter?  If  you  ask  what  it  is  worth  to  him,  it  may  be  worth 
all  that  he  has.  But  is  that  the  reasonable  rule  to  apply  in  fixing  the 
compensation  of  a  corporation  established  for  the  public  good  and  not 
solely  for  the  private  benefit  of  the  corporators  who  have  it  in  charge? 

Mr.  BrTTERwoRTn.     That  is  not  the  case  I  put  by  any  means. 

Mr.  Crisp.  I  understood  the  case  put  by  the  gentleman  to  be  that 
of  a  railroad  company,  who  say  to  the  people  in  a  certain  locality,  "  You 
have  been  paying  6  cents  a  bushel  for  hauling,  will  you  not  agree  to  give 
us  3?"  Does  not  that  question  look  to  what  it  is  worth  to  the  people 
who  receive  the  service,  and  not  to  the  cost  to  the  transporter? 

Mr.  Butterwortii.  No;  for  the  companv  that  builds  the  road 
takes  into  consideration  when  building  it  what  competition  there  will  be, 
what  the  local  traffic  will  be,  what  the  through  traffic  will  be — it  takes 
into  consideration  all  the  circumstances  which  go  to  fix  the  price.  And 
I  say,  instead  of  the  man  at  the  intermediate  point  being  injured,  he 
saves  3  cents  a  bushel;  and  ultimately,  according  to  the  experience  we 
have  had  in  this  countiy,  he  may  save  still  more.  He  is  not  injured  by 
the  reason  of  the  fact  that  the  company  runs  their  cars  ten  miles  beyond, 
to  a  point,  where,  in  order  to  compete,  they  must  take  a  lower  charge. 

Mr.  Scott./  The  gentlemen  from  Georgia  [Mr.  Crisp]  before  he 
resumes  will  allow  me  to  make  one  suggestion.  He  referred  in  the  case 
he  put  to  the  rate  between  New  York  and  Atlanta  as  compared  with  the 
rate  between  New  York  and  New  Orleans.  He  said  that  the  railroad 
companies  were  charging  75  cents  a  hundred  from  New  Orleans  to  New 
York,  and  a  dollar  a  hundred  to  Atlanta,  which  was  not  half  the  distance. 


INTER -STATE    COMMERCE    LAW.  129 

Mr.  Crisp.     A  little  more  than  half. 

Mr.  Scott.  A  little  more  than  half.  Xow  the  gentleman  must 
remember  that  the  competitor  with  the  railroad  from  New  Orleans  to 
New  York  is  the  Atlantic  Ocean.  Steamships  plying  between  New 
York  and  Xew  Orleans  fix,  to  a  certain  extent,  the  rates  between  those 
two  cities.  By  the  competition  of  the  railroads  from  Xew  Orleans  to 
New  York,  these  ocean  rates  are  kept  down.  Your  bill  proposes  to  drive 
these  railroads  out  of  that  competitive  business;  and  such  a  policy  must 
result  in  placing  the  entire  control  of  the  business  between  Xew  Orleans 
and  Xew  York  in  the  hands  of  the  steamships,  while  the  only  satisfaction 
the  people  of  Atlanta  get  is  that  possibly  the  people  of  Xew  Orleans  are 
compelled  to  pay  eventually  a  dollar  a  hundred  for  transportation  from 
New  Orleans  to  Xew  York,  whereas  if  they  were  allowed  the  competi- 
tion of  the  railroads  that  business  might  be  done  for  75  cents  a  hundred. 
"  Misery  loves  company." 

Mr.  Crisp.  Mr.  Speaker,  I  confess  I  can  not  see,  as  suggested  by 
my  friend  from  Pennsylvania  [Mr.  Scott]  and  niy  friend  from  Ohio  [Mr. 
Butterworth],  that  the  effect  of  this  proposition  will  be  to  increase  the 
through  rates  unless  the  present  through-rate  system  is  based  upon  a 
rule  which  requires  the  local  shippers  to  sustain  the  loss  incurred  on  the 
through  rates.  If  the  charge  from  Xew  York  to  New  Orleans  of  76 
cents  pays  a  small  profit  to  the  railroad  company,  I  ask  again,  what  kind 
of  a  profit  must  be  paid  for  a  haul  which  is  half  the  distance,  when  the 
charge  is  83^  per  cent,  more?  We  do  not  seek,  as  I  was  going  on  to  say, 
to  establish  any  pro  rata  arrangement  of  so  much  a  mile.  We  agree  by 
this  bill  that  the  companies  may  charge,  if  it  is  reasonable  to  do  so,  as 
much  for  the  short  haul  as  for  the  long  haul,  and  no  more. 

Mr.  Zach.  Taylor.  Is  not  the  proposition  of  the  bill  designed  to 
meet  cases  of  this  kind  :  Between  Covington  and  Memphis,  a  distance 
of  37  miles,  the  charge  for  transportation  of  cotton  is  $1.15  a  bale,  but 
from  Memphis  to  Xew  York  the  charge  is  only  90  cents,  and  it  passes 
over  the  same  line? 

Mr.  Crisp.  Mr.  Speaker,  if  it  were  not  going  over  a  subject  al- 
ready exhausted,  I  could  occupy  an  hour  in  bringing  to  the  attention 
of  the  House  actual  cases  which  have  arisen  in  the  transaction  of  busi- 
ness by  interstate  carriers  which  would  absolutely  shock  the  sense  of  jus- 
tice of  any  man  who  feels  that  the  public  has  a  right  to  demand  abso- 
lute equality  in  transportation  rates. 

Mr.  Butterworth.  But  do  not  the  other  sections  of  the  bill  cor- 
rect that,  leaving  no  necessity  for  an  arbitrary  law  fixing  a  rate  without 
reference  to  circumstances? 

Mr.  Crisp.  If  my  friend  will  pardon  me,  I  must  go  on.  I  will  say 
to  him,  however,  that  the  other  sections  of  the  bill  have  a  tendency  to 
do  that,  but  in  view  of  the  fact  that  some  court,  some  jury,  somebody 
charged  with  the  execution  of  this  law  might  think  it  the  intention  or 
design  that  more  should  be  charged  for  the  shorter  than  the  longer  haul, 
we,  by  a  provision  inserted  in  the  bill,  give  the  decision  of  the  legisla- 
tive branch  of  the  Government,  that  in  no  case,  except  it  be  a  special 
one,  can  such  a  rate  be  reasonable  or  just.  That  is  the  purpose  of  the 
provision  referred  to. 

Mr.  O'Xeill,  of  Pennsylvania.    I  do  not  wish  to  interrupt  the  gen- 


130  INTER -STATE    COMMERCE    LAW. 

tleman ;  but  in  reference  to  this  question,  whether  these  charges  for 
freight  pay  or  do  not  pay  the  railroad  companies  for  hauling,  I  want  to 
ask  him  the  simple  question,  whether  the  'people  of  this  country  are 
complaining  that  within  the  last  ten  or  fifteen  years  freights  have  been 
reduced  from  24  cents  per  ton  per  mile  to  less  than  1  cent — to  seven-eighths 
of  1  cent? 

Mr.  Crisp.  My  good  friend  from  Pennsylvania  will  pardon  me  for 
not  replying  fully,  as  I  have  already  occupied  so  much  time.  1  will  say, 
however,  that  this  is  not  the  first  time  I  have  heard  the  claim  set  up  that 
the  railroad  companies  are  entitled  to  great  credit  for  having  during  the 
last  twenty  years  reduced  their  rates. 

We  are 'told  by  gentlemen  representing  the  railroads  that  this  reduc- 
tion of  rates  is  a  mere  matter  of  grace  to  the  people,  who  should  rise  up 
in  thankfulness  therefor;  and  figures  are  presented  to  show  how  much 
greater  the  incomes  of  the  roads  would  have  been  if  they  had  maintained 
the  rates  of  twenty  years  ago.  To  be  truly  grateful  we  must  believe  that 
all  the  advances  and  progress  made  in  machinenT  and  cars  used  for  the 
transportation  of  freight  are  to  be  used  for  the  benefit  of  the  railroads 
and  not  for  the  public.  Such  a  proposition  denies  to  the  public  the  sav- 
ing derived  from  the  use  of  the  discoveries  in  steam  appliances.  It 
denies  to  the  public  the  advantage  of  the  reduction  in  the  price  of  steel. 
It  denies  to  the  public  the  benefit  of  the  reduction  in  the  price  of  every- 
thing that  is  necessary  to  sustain  life.  It  denies  to  the  public  and  claims 
for  the  railroads  all  the  benefits  arising  from  a  general  reduction  in  the 
value  of  all  property  and  is  entirely  indefensible. 

I  do  not  wish  to  be  understood  as  underrating  these  corporations  as  a 
means  to  advance  civilization  and  promote  the  general  welfare;  but  I  do 
mean  to  enter  a  protest  against  the  claim  that  under  any  sort  of  rule  they 
would  have  a  right  to  maintain  charges  of  twenty  years  ago,  when  every- 
thing else  has  diminished  in  value,  and  to  mildly  suggest  that  perhaps 
these  have  not  been  altogether  so  generous  in  reductions  as  their  advo- 
cates would  have  us  believe.  Has  the  reduction  of  local  rates  on  any  line 
of  railroad  in  the  United  States  been  as  great  during  the  past  twenty 
years  as  the  reduction  in  the  price  of  clothing,  as  the  reduction  in  the 
price  of  sugar,  as  the  reduction  in  the  price  of  shoes,  as  the  reduction  in 
the  price  of  cotton,  as  the  reduction  in  the  price  of  almost  eveiy  article 
which  humanity  uses?  I  grant  you  at  the  great  competing  centers  reduc- 
tions have  been  made;  but  I  submit  that  an  inspection  of  the  tariff  of 
corporations  will  show  that  there  has  been,  no  commensurate  reduction 
at  intermediate  points. 

For  what  purpose  do  the  people  of  Pennsylvania  grant  to  a  railroad 
the  right  to  build  on  the  territory  of  the  State?'  What  Ts  the  object  of  the 
grant?  Is  it  because  somebody  not  living  in  Pennsylvania  may  be  bene- 
fited by  the  railroad?  Is  not  the  paramount  object  the  benefit  of  the 
people  who  own  the  soil?  Is  not  that  the  primary  object?  Are  those 
people  living  along  the  line  of  this  great  road  —  those  people  dependent 
on  that  means  of  transportation  —  are  they  to  be  charged  with  burdensome 
rates  in  order  that  the  railroad  may  transport  or  obtain  freight  at  a  point 
some  distance  from  it  ? 

I  say  the  true  policy  of  a  railroad  is  to  build  up  shippers  along  its 
line.     At  last  on  them  it  must  depend  for  its  life.     The  contrary  policy 


INTER -STATE    COMMERCE    LAW.  131 

must  result  in  breaking  down  those  upon  whom  the  road  must  depend 
for  support.  It  depreciates  the  value  of  property  along  the  line.  It 
diminishes  population  and  defeats,  in  every  way,  the  object  and  purpose 
of  the  public  in  authorizing  the  construction  of  the  road. 

Mr.  McKinley.  I  would  be  glad  if  the  gentleman  from  Georgia 
would  give  the  House  an  example  which  would  realize  an  exception  to 
relieve  the  carrier  from  the  operation  of  this  act  —  if  he  can  give  us  an 
example  in  practical  business  which  would  justify  the  commission  in 
making  the  exception  that  is  provided  for  in  the  last  clause  of  section 
four. 

Mr.  Crisp.  Mr.  Speaker,  I  should  not  like  to  undertake  to  do  that, 
but  I  will  say  very  frankly,  speaking  my  own  views,  the  other  House 
conferees  not  being  present  can  not  speak  for  themselves,  nor  can  I 
speak  for  them.  I  was  of  the  opinion  the  general  rule  ought  to  be  that 
in  no  case  should  a  greater  charge  be  made  for  a  shorter  distance  than 
was  made  for  the  longer  one  when  the  shorter  is  included  in  the  longer. 
That  is  my  own  opinion  about  it,  but  in  deference  to  the  sentiment, 
which  existed  in  some  breasts  that  there  might  be  a  hardship  in  an  iron- 
bound  rule,  believing  as  I  do  the  commission  organized  under  this  act 
would  be  slow  to  relax  the  general  rule,  believing  that  in  nearly  every 
case,  if  not  every  one,  it  would  be  found  the  enforcement  of  the  rule 
would  work  no  hardship,  I  agreed  to  this  provision.  I  had  another  rea- 
son for  agreeing  to  it,  one  that  always  has  weight  with  the  practical 
legislator.  I  had  to  do  it  to  get  an  agreement  between  the  conferees  of 
the  two  Houses. 

Mr.  McKinley.     What  particular  case? 

Mr.  Crisp.  None  were  cited.  I  understand  it  to  be  like  this : 
Here  is  a  universal  rule  which  we  propose  to  establish.  There  may  pos- 
sibly be  a  case,  though  I  confess  I  can  not  see  it,  when  the  enforcement 
of  this  rule  would  work  a  hardship  to  a  transportation  company,  and 
out  of  abundance  of  caution,  to  do  no  injustice,  whenever  the  complain- 
ant can  establish  that  in  a  specific  case  the  operation  of  the  general  rule 
would  be  unjust  in  that  particular  case,  the  commission  may  relieve  him 
from  the  operation  of  the  rule. 

Mr.  Hepburn.  Does  the  word  "cases,"  in  the  fourteenth  line  of 
the  fourth  section,  in  your  judgment,  refer  to  shipments  or  to  roads? 

I  refer  to  the  use  of  the  word  in  connection  with  the  proviso  : 

Provided,  however,  That  upon  application  to! the  commission  appointed  under  the 
provisions  of  this  act,  such  common  carrier  may,  in  special  cases,  after  investigation  by 
the  commission,  be  authorized  to  charge  less  for  longer  than  for  shorter  distances  fcr  the 
transportation  of  passengers  or  property. 

Mr.  Crisp.    In  my  judgment  it  applies  to  shipments. 

Mb.  Hepburn.    If  I  believed  that  1  would  not  vote  for  your  bill. 

Mr.  Crisp.  I  should  be  sorry  to  lose  the  support  of  my  friend  from 
Iowa,  I  do  not  want  to  be  misunderstood  in  the  answer  I  have  given. 
I  think  that  it  applies  to  shipments  in  this  sense,  that  all  like  cases  on 
that  railroad  should  be  operated  under  the  same  rule. 

Mr.  Hepburn.  Would  it  divert  the  gentleman  from  his  argument 
to  permit  me  to  give  an  illustration  of  the  point  I  mean,  and  then  ask  his 
opinion  in  connection  with  it? 

Mr.     Crisp.    I  would  be  glad  if  the  gentleman  would  wait  a  mo- 


132  INTER -STATE    COMMERCE    LAW. 

ment,  as  I  prefer  to  get  through  as  soon'as  possible  with  niy  remarks,  and 
think  I  may  perhaps  answer  the  point  to  which  he  refers  in  the  course 
of  the  discussion. 

There  are  only  one  or  two  other  points,  Mr.  Speaker,  to  which  I 
wish  to  call  the  attention  of  the  House.  That  exception,  or  authority  to 
suspend  the  rules,  was  granted  by  the  committee  and  put  in  upon  the 
idea  that  there  might  be  conceivable  cases  where  injury  or  injustice 
would  result,  and  hence  we  would  give  power  to  the  commission  to  re- 
lieve them. 

The  next  section  that  has  excited  comment  is  that  which  prohibits 
the  pooling  of  rates.  It  takes  it  for  granted  that  every  member  present 
knows  what  is  meant  by  the  words  "  pooling  rates."  The  railroad  com- 
panies, or  their  representatives,  or  rather  the  leading  representative  of 
the  system  of  pooling,  object  to  that  term  as  offensive,  and  say  that  a 
very  great  amount  of  misconception  exists  in  the  public  mind  on  the  sub- 
ject of  pooling,  largely  resulting  from  the  unfortunate  use  of  that  term; 
and  suggests  in  lieu  of  it  that  it  is  a  system  for  the  "maintenance  of  rates 
and  traffic  unity."  That  is  what  he  calls  the  system  which  we  seek  to 
prohibit  in  this  bill. 

Pooling,  Mr.  Speaker,  is  a  device  —  and  of  course  I  do  not  use  that 
word  in  any  offensive  sense — on  the  part  of  independent  monopolies  to 
build  up  and  maintain  one  great  monopoly.  It  is  a  device  to  defeat  com- 
petition ;  and  when  they  talk  of  the  ' '  maintenance  of  rates  and  traffic 
unity,"  they  mean  that  those  companies  that  were  built  by  the  public  to 
give  the  people  the  benefit  of  competition,  shall  be  united  with  each 
other  by  this  new  device,  so  as  to  make  them  practically,  for  rate  pur- 
poses, one  line. 

We  have  heard  much  of  the  importance  to  the  general  public  of  sta- 
bility of  rates,  and  I  agree  that  it  is  important.  We  hear  much  said  in 
defense  of  this  system,  and  the  allegation  is  made  that  it  is  merely  a  sys- 
tem to  preserve  and  maintain  regularity  of  rates  and  prevent  railroad 
wars.  A  significant  fact  in  this  connection  is  that  in  no  case  on  record, 
I  undertake  to  say,  can  you  find  where  two  railroad  companies  have 
pooled  their  local  rates.  Wherever  the  railroad  is  omnipotent,  so  far  as 
t  he  shipments  are  concerned,  wherever  they  can  put  upon  the  shipper 
a  ny  rate  suggested  by  their  cupidity  or  avarice,  or  suggested,  if  you 
p  lease,  by  the  other  rule  so  lauded  by  these  gentlemen  as  to  what  the 
f  reight  will  bear,  in  every  such  case  you  find  each  road  standing  by  itself 
and  making  no  pool. 

Therefore  I  aver  the  object  of  pooling  is  to  destroy  competition. 
You  may  present  it  in  any  light  you  choose,  call  it  b}r  any  name  you 
please,  that  is  its  object,  and  it  never  was  discovered  until  the  competing 
lines,  which  had  been  built  for  the  public  interest,  were  requiring  these 
corporations  to  transport  for  the  public  at  such  reduced  rates  that  they 
were  not  making  what  they  thought  they  ought  to  make.  I  maintain, 
sir,  that  the  railroad  business,  or  the  business  of  transportation,  is  no 
exception  in  one  respect  from  any  other  business,  and  that  is  that  it  is  to 
the  interest  of  the  public  to  have  competition. 

While  it  is  true  that  under  the  railway  system  as  it  exists  to-day  it 
seems  that  railroads  will  not  quietly  submit  to  competition,  yet  I  sug- 
gest that  is  the  fault  of  the  railway  companies  and  not  of  the  public. 


INTER -STATE    COMMERCE    LAW.  133 

Here  is  a  Hue  of  railway  extending,  if  you  please,  from  Atlanta,  in  the 
State  of  Georgia,  to  Macon,  in  the  same  State.  If  investors  conceive  the 
idea  that  the  business  of  that  line  is  sufficient  to  justify  another,  they  go 
to  the  Legislature,  which  represents  the  people,  and  ask  the  right  to 
build  the  "line,  the}r  ask  that  the  State  exercise  and  grant  to  them  the 
right  of  eminent  domain,  in  order  that  they  may  acquire  a  right  of  way. 
"What  is  the  inducement  to  the  State  to  grant  the  charter;  is  it  not  that 
the  people  may  have  the  benefit  of  competition  and  thus  perhaps  get 
better  and  cheaper  rates?     Unquestionably  this  is  so. 

The  Legislature  that  grants  to  the  corporation  a  charter  that  enables 
it  to  transact  its  business,  represents  the  public,  and  grants  the  franchise 
only  for  the  public  good,  to-wit,  that  the  people  between  the  two  points 
shall  have  the  benefit  of  competition.  That  is  true  everywhere  where 
there  are  competitive  lines. 

What  is  the  effect  of  pooling?  It  is  to  defeat  the  object  of  the  Legisla- 
ture. It  is  to  defeat  the  interest  of  the  public.  It  is  to  place  those  lines 
in  the  same  condition  that  they  would  be  if  one  great  railway  magnate  or 
great  railway  corporation  should  become  the  owner  of  the  line.  Gentle- 
men who  sustain  this  practice  say  to  us  that  if  you  prohibit  pooling,  the 
result  will  be  a  railroad  war,  that  the  irresponsible  bankrupt  concern  will 
reduce  its  rates  and  undercut,  that  the  other  will  undercut,  and  one  will 
go  under,  and  it  will  be  a  case  of  the  survival  of  the  fittest.  If  that 
lamentable  state  of  affairs  should  exist,  it  will  be  the  fault  of  the  railway 
companies  themselves,  who  will  not  brook  that  legitimate  competition 
that  every  other  enterprise  has  to  bear;  but  even  if  this  dire  result  should 
occur;  then,  Mr.  Speaker,  we  would  be  in  no  worse  condition  than  we 
are  to-day,  where  the  effect  of  the  pool  is  practically  to  make  one  line. 

Mr.  Hopkds  s.  I  ask  the  gentlemen  if  the  clause  in  section  4  will 
not  have  a  tendency  to  prohibit  these  rate  wars?  If  they  put  down  the 
price  of  freight  at  a  terminal  point  they  will  be  compelled  to  put  it  down 
all  along  theline,  and  no  road  can  afford  to  engage  in  such  a  war  with 
section  4  in  the  bill. 

Mr.  Crisp.  There  may  perhaps  be  some  tendency  of  that  sort;  but 
to  me  it  occurred  that  there"  could  be  no  justification  looking  to  the  pub- 
lic interest  for  a  practice  of  this  sort.  Why,  Mr.  Speaker,  it  is  not  an 
uncommon  thing  in  a  State  for  the  Legislature  to  provide  that  such  and 
such  a  railroad  company  shall  not  own  another  or  operate  another.  In 
my  judgment  one  of  the  wisest  things  a  State  Legislature  could  do  in 
granting  a  charter  would  be  to  provide  that  a  company  should  not  engage 
in  any  other  business  but  the  business  of  transportation,  and  that  it 
should  not  acquire  the  ownership  of  any  other  line.  Why  not?  There 
is  nothing  in  this  bill,  you  understand,  that  prevents  traffic  arrangements 
by  which  continuous  carriages  are  made.  That  is  not  prohibited.  The 
prohibition  is  against  the  pooling  of  freights  or  the  receipts  of  competi- 
tive railroads.  You  all  know  what  kind  of  pools  have  existed  and  do 
exist  in  this  country  to-day. 

Under  that  system  there  is  no  inducement  to  the  railroad  company 
to  furnish  good  transportation;  there  is  no  incentive  to  the  enterprise  and 
to  the  energy  so  typical  of  the  American  character.  They  go  into  the 
pool,  and,  according  to  the  agreement,  so  you  receive,  whether  you  carry 
a  pound  of  freight  or  a  million  pounds  of  freight.  The  amount  of  money 


134  INTER -STATE    COMMERCE    LAW. 

that  comes  in  on  all  the  roads  is  put  into  a  pool.  A  commissioner  is 
appointed  at  a  great  salary,  paid  by  these  railroads,  and  it  is  his  duty  to 
divide  the  receipts  according  to  the  agreement,  one  receiving  five, 
another  ten,  another  twenty,  or  whatever  may  be  the  per  cent,  agreed 
upon. 

There  are  other  kinds  of  pools,  pools  which  agree  that  a  certain  rail- 
road company  not  in  the  pool  shall  not  have  a  right  to  ship  its  freight 
over  their  line.  "When  I  say  it  shall  not  have  the  right  I  mean  the  rate  is 
prohibitory.  They  put  such  a  rate  on  the  competing  line  at  another 
point  that*  the  shipper  can  not  ship  over  it,  but  must  take  one  of  the 
lines  within  the  pool.  They  have  an  arrangement  by  which  the  water 
transportation  of  the  country  can  not  be  used  and  at  the  same  time  give 
the  people  the  benefit  of  the  railway. 

The  Central  Pacific  Railroad  Company,  the  evidence  shows,  has 
arrangements  of  this  sort,  that  they  will  make  special  rates  to  a  shipper 
over  their  road  provided  he  will  agree  he  will  give  them  all  his  freight 
and  will  not  ship  a  dollar's  worth  by  water.  If  he  will  do  that  he  will 
have  a  special  rate.  If  he  will  exercise  the  freedom  and  independence 
and  manhood  that  are  supposed  to  belong  to  our  people,  then  he  has 
to  pay  to  this  creature  of  the  public  an  increased  price  for  his  transpor- 
tation. 

They  have  had  pools  by  which  a  railway  in  the  city  of  Chicago 
agreed  to  pay  to  a  single  live-stock  firm  in  that  city  $15  for  every  car- 
load they  carried  for  anybody;  and  in  consideration  of  that  the  firm  was 
to  even  up  according  to  an  understanding  they  had.  He  was  to  even  up; 
that  is,  the  firm  was  to  give  each  railroad  the  amount  of  transportation 
that  according  to  the  bargain  it  was  to  have,  not  according  to  the  public 
demand,  not  according  to  the  choice  of  the  shipper,  but  what  they  in 
in  their  magnanimity  or  wisdom  thought  was  satisfactory  or  sufficient 
between  themselves,  and  they  directed  where  your  cattle  would  go  and 
where  yours  would  go,  and  you  would  be  bound  to  ship  them  in  that 
way. 

That  is  another  kind  of  pool  they  have  had  in  this  country.  Now, 
Mr.  Speaker,  I  propose  to  break  up  that  system. 

Mr.  Hayden.  I  ask  the  gentleman  whether  they  do  not  have  these 
pools  abroad  or  some  similar  arrangement? 

Mr  Crisp.     I  have  heard  that  they  do. 

Mr.  Anderson,  of  Kansas.  That  is  upon  the  principle  of  total 
depravity.     [Laughter.] 

Mr.  Crisp.  There  are  some  very  remarkable  things  in  connection 
with  that  which,  if  I  had  the  time,  I  might  relate.  I  would  suggest, 
however,  to  my  good  friend  from  Massachusetts  in  passing  that  the  sys- 
tem abroad  can  hardly  be  compared  fairly  to  the  system  in  this  country 
in  view  of  the  difference  in  the  circumstances.  But  the  point  we  make 
is  that  any  system  or  practice  which  tends  to  destroy  competition  is  an 
injury  to  the  people  who  must  use  the  roads. 

Why  is  it  not  so?  Can  any  good  reason  be  given?  The  only  reply 
made  by  the  railroads  is:  "If  you  do  not  allow  us  to  pool  we  will  com- 
pete, and  our  competition  will  be  ruinous;  we  will  ruin  ourselves  if  you 
do  not  stop  us ! "  Why  can  not  they  compete  legitimately  as  people  do 
in  other  business?  We  think  that  they  ought  to  do  so,  and  therefore  we 
prohibit  pooling. 


IXTER-  STATE    COMMERCE    LAW.  135 

By  the  terms  of  this  bill  we  create  a  railroad  commission,  and  I  ask 
the  attention  of  gentlemen  interested  for  a  few  moments  to  that  point. 

I  say  with  the  utmost  frankness,  that,  as  an  individual,  I  preferred 
the  bill  without  the  commission,  but  I  say  also  in  the  same  breath  that  I 
am  not  to  be  classed  with  those  who  will  not  take  anything  unless  they 
can  get  all  they  want,  and  that,  with  all  respect  I  submit,  must  be  the 
attitude  of  those  gentlemen  who  oppose  this  bill  because  of  the  com- 
mission. What  are  the  powers  of  that  commission?  In  particular  cases, 
under  the  fourth  section  of  the  bill,  they  ma}r  relax  the  rule  therein  set 
up.  As  to  other  matters,  they  may  require  the  railroads  to  make  returns 
of  their  accounts,  their  stocks  and  bonds,  their  running  expenses,  rates 
of  charge,  etc. 

Where  the  complainant  invokes  their  authority  they  may  pass  upon 
a  given  case  between  the  individual  and  the  railroad  company.  When 
they  so  pass  upon  the  case  their  finding  upon  the  facts  is  prima  facie 
true.  They  have  no  power  to  give  vital  force  and  effect  to  their  judg- 
ment, but  it  is  prima  facie  true  in  the  courts  of  the  country.  Is  there 
anything  in  this  power  that  is  alarming  or  dangerous  to  the  public?  Is 
there  anything  in  this  bill  that  should  lead  representative  men,  men  who 
have  had  large  experience  in  public  affairs,  to  say  that  nowhere  in  this 
country  are  to  be  found  men  of  power  enough,  men  good  enough,  men 
honest  enough  to  administer  the  law? 

I  should  be  ashamed,  sir,  of  my  people  if  I  believed  in  any  such 
theory  as  that.  I  should  be  ashamed  to  come  before  the  country  and 
state  that  I  did  not  believe  it  was  in  the  power  of  the  President  of  the 
United  States,  with  the  concurrence  of  the  Senate,  to  select  men  wise 
and  upright  and  honest  enough  to  carry  out  this  law.  I  am  not  one  of 
those  who  believe  that  human  nature  is  so  utterly  depraved  that  we  can 
find  nobody  left  who  is  honest  and  upright.  What  other  powers  are 
there  than  those  I  have  enumerated.     None. 

Mr.  Speaker,  we  do  not  drive  the  complainant  to  the  Railroad  Com- 
mission. If  he  chooses  to  go  there  he  has  the  right  to  go  there  and  in- 
voke this  power  which  is  created  by  the  government  for  his  protection; 
but  if  he  prefers,  for  any  reason,  to  go  to  the  courts  of  the  country,  they 
are  open  to  him.  The  same  judge  who  passes  upon  his  rights  of  prop- 
erty, his  rights  of  life  and  liberty,  will  there  pass  upon  his  rights  in  his 
dealings  with  the  railroads. 

Objection  is  made  by  some  gentlemen  who  are  in  the  main  friendly 
to  this  bill,  because  we  have  not  conferred  jurisdiction  upon  the  State 
courts  to  hear  and  determine  these  questions.  I  have  two  replies  to 
make  to  that  criticism.  Waiving  for  the  present  the  question  of  our 
power,  by  an  act  of  Congress,  to  give  to  the  courts  of  a  State  jurisdiction 
to  try  a  matter  of  this  character — a  statutory  case — waiving  that,  I  say  to 
those  gentlemen  that  if  we  had  insisted  upon  putting  that  provision  in 
this  bill,  we  would  have  had  no  agreement.  Under  the  bill  as  it  stands 
no  great  injustice  or  hardship  can  arise  to  the  citizen. 

He  can  go  to  the  commission,  but  if  he  is  one  of  those  who,  either 
from  suspicion  or  for  any  other  reason,  believe  that  this  commission  will 
not  do  right,  then  he  can  go  into  court  and  file  his  suit  and  have  it  tried 
as  every  other  case  is  tried,  the  only  difference  being  that  it  is  proposed 
by  this  bill  to  allow  to  such  an  individual  in  every  case  of  recovery  a 


136  INTER -STATE    COMMERCE    LAW. 

reasonable  attorney  fee,  to  be  taxed  by  the  court.  That  provision  is,  I 
admit,  an  exceptional  one,  and  some  complaint  has  been  made  of  it  as  a 
hardship. 

The  answer  I  make  to  that  complaint  is,  that  on  the  one  hand  is  the 
humble  individual,  the  small  shipper,  while  on  the  other  is  the  great  cor- 
poration with  its  wealth,  its  employees,  and  its  power.  To  put  them  upon 
something  like  an  equal  footing,  we  say  to  the  poorest  man  in  the  land, 
who  feels  that  he  has  suffered  a  wrong  at  the  hands  of  one  of  these  cor- 
porations, that  he  shall  be  enabled  to  test  the  question  before  the  courts; 
and  we  say  to  him,  if  you  prove  to  have  been  correct  in  your  judgment 
as  to  the  wrong  inflicted  upon  you,  then  we  will  enable  you  to  enforce 
your  rights  by  paying  the  counsel  that  you  employ  for  that  purpose.  Is 
not  that  fair  enough?  Are  we  to  be  told  that  because  we  do  not  provide 
that  these  matters  may  be  tried  and  determined  in  the  State  courts  we 
leave  the  railroads  free  to  discriminate,  and  that  they  are  still  permitted 
to  go  on  in  their  oppression  of  the  people? 

I  commend  this  idea  to  those  gentlemen  who  base  their  opposition 
upon  that  ground. 

Mr.  Caldwell.  In  the  proviso  of  the  fourth  section  power  is  granted 
to  this  commission  to  make  exceptions  under  the  long-and-short  haul 
clause.  That  was  my  great  objection  to  the  original  Cullom  bill,  because 
I  believed  such  a  grant  of  power  ought  never,  under  any  circumstances, 
to  be  given  to  the  commission  or  anybody  else  —  a  power  to  make  some 
and  break  others.  Now,  will  my  friend  tell  me  the  difference  between 
the  clause  as  contained  in  the  bill  agreed  upon  by  the  conference  com- 
mittee and  the  original  £crant  of  power  to  the  commission  under  the  Cul- 
lom bill? 

Mr.  Crisp.  In  the  Cullom  bill,  Mr.  Speaker,  as  the  gentlemen  will 
find  by  turning  to  it,  these  words  are  stricken  out,  "  and  from  the  same 
original  point  of  departure  or  to  the  same  point  of  arrival.']  Those 
words  were  stricken  out  because,  in  our  judgment,  they  put  a  limitation 
upon  what  we  understand  to  be  the  rule  that  in  no  case  should  a  greater 
amount  be  charged  for  a  shorter  than  a  longer  haul.  With  that  language 
in  the  Cullom  bill  implied  that  there  might  be  cases  where  a  greater 
charge  might  be  made  for  a  shorter  than  a  longer  haul.  By  striking  out 
those  words  we  made  the  rule  general  that  in  no  case  could  such  a  charge 
be  made,  no  matter  what  the  point  of  departure  or  the  point  of  arrival 
might  be. 

As  the  gentleman  understands,  a  practice  exists  among  the  railroad 
companies  by  virtue  of  which,  at  competitive  points,  freight^  received 
over  one  line  goes  cheaper  than  if  received  over  another.  Now,  with 
those  words  in,  there  would  always  be  that  exception  in  regard  to  the 
point  of  departure  or  the  point  of  arrival.  With  those  words  stricken 
out,  the  law  is  general;  and  that  was  the  sole  object  in  making  the 
chano-e. 

The  Senate  bill  provided  that  the  commission  might  make  general 
regulations  exempting  common  carriers  from  the  operation  of  that  rule. 
We  restricted  that  by  requiring  it  to  be  done  only  in  special  cases  after 
examination.  That  is  the  only  difference  between  the  two  sections,  as  I 
understand. 

Now,  the  only  power  of  the  commission  after  that  is  to  require  pub- 


INTER -STATE    COMMERCE    LAW.  137 

licity  of  the  rates  of  the  railroads,  to  require  them  to  make  return  of  the 
amount  of  their  stocks  and  bonds.  Gentlemen  all  recognize  the  import- 
ance of  a  provision  of  this  kind.  One  of  the  great  troubles  in  the  way 
of  ascertaining  to-day  what  is  a  reasonable  charge  by  a  common  carrier 
is  the  fact  that  stocks  are  watered,  and  it  is  hard  to  find  out  what  is  the 
actual  cost  of  a  railroad. 

Watered  stocks,  bonds  issued  for  speculative  purposes,  all  these  enter 
into  the  present  computation  of  the  railroad  companies  in  fixing  the  sum 
upon  which  they  must  earn  a  reasonable  interest.  The  object  of  the 
publicity  required  in  this  bill  is  that  when  resort  is  had  to  the  courts, 
when  you  appeal  to  the  enlightened  conscience  of  an  intelligent  jury, 
they  may  understand  exactly  the  cost  of  the  plant  and  the  cost  of  trans- 
portation, so  as  to  determine  what  is  or  is  not  a  reasonable  charge.  The 
bill  provides  that  you  can  search  at  law  the  conscience  of  every  officer 
of  a  railroad.  You  can  force  him  to  disclose  any  fact  connected  with 
transportation.  If  the  fact  is  such  that  it  would  expose  him  to  criminal 
indictment,  then  we  provide  that  it  shall  not  be  so  used  against  him.  If 
it  is  a  mere  question  affecting  damages,  then  of  course  it  may  be  used; 
and  it  enables  the  suitor  to  get  his  case  fairly  and  fully  before  a  jury. 

There  is  one  other  provision  to  which  I  shall  call  attention,  and  then 
I  shall  close.  As  I  said  at  the  outstart,  nearly  all  the  provisions  of  this 
bill  are  to  be  found  to-day  in  the  common  law.  One  of  the  great  pur- 
poses we  have  in  view  is  to  aid  the  common  law  by  providing  a  penalty 
for  its  violation  other  than  the  penalty  of  damages.  At  common  law  a 
trespass  or  a  wrong  gives  the  party  aggrieved  the  right  to  sue  and  re- 
cover damages.  We  propose  to  say  that,  in  addition  to  the  common  law 
liability,  any  transportation  company  violating  this  law  shall  be  liable  to 
have  its  officers  indicted,  and  if  found  guilty  they  shall  be  punished  by 
a  fine  not  exceeding  $5,000. 

If  the  gentlemen  will  examine  the  bill  they  will  observe  that  it  is 
framed  in  such  a  way  as  to  declare  certain  practices  unlawful.  Turning 
to  the  penal  section  of  the  bill,  you  will  find  that  if  a  common  carrier 
shall  be  found  guilty  of  doing  anything  in  this  act  forbidden,  or  failing 
to  do  anything  in  this  act  required,  the  officers  of  the  company  may  be 
indicted  in  the  district  courts  of  the  United  States,  and  if  found  guilty 
may  be  punished  by  a  fine  not  exceeding  $5,000.  This  provision  was  in- 
tended to  aid  the  common  law.  It  was  designed  for  the  protection  of 
every  individual,  no  matter  how  humble,  who  may  be  wronged  by  the 
action  of  these  corporations. 

This,  Mr.  Speaker,  is  the  bill.  It  is  not,  as  I  have  already  said, 
exactly  as  I  would  like  it.  It  contains  one  or  two  propositions  which 
I  would  be  glad  to  have  out ;  and  there  have  been  omitted  from  it  one 
or  two  propositions  which  I  would  be  glad  to  have  in.  But  taken  as  a 
whole,  I  commend  this  bill  to  the  representatives  of  the  people  who 
believe  that  wrong  is  being  done  by  these  corporations,  who  believe  that 
the  murmurs  of  the  people  all  over  this  country  do  not  come  to  us  except 
as  the  expression  of  some  injury  perpetrated  upon  them  by  transportation 
companies. 

To  those  gentlemen  who  desire  to  make  the  assertion  of  the  power 
of  the  Government  to  control  these  corporations  I  commend  this  bill, 
and  ask  them  to  sustain  it.    The  practices  which  it  condemns  are  unjust 

10 


138  INTER -STATE    COMMERCE    LAW. 

to  the  people.  An  honest  investigation  of  the  rights  of  the  railroad  com- 
panies and  the  people  would  forbid  them;  and  in  my  judgment  such 
practices,  and  the  arguments  by  which  they  have  been  sustained,  amount 
to  an  absolute  assault  upon  public  justice. 

I  believe  in  the  paramount  right  of  the  people.  I  would  not  harm 
the  railroads.  I  would  allow  them  to  pursue  their  legitimate  calling,  but 
I  would  bear  in  mind  always  the  rights  of  the  people.  In  my  judgment 
the  bill  I  now  commend  to  you  protects  and  preserves  all  the  rights  of 
the  railroads,  while  at  the  same  time  it  gives  some  modicum  of  relief  to 
a  long  suffering  and  oppressed  people.    (Loud  applause.) 


PROTEST     OF     THE      MINNEAPOLIS      BOARD     OF 

TRADE. 

Against   the    Inter-State  Commerce  Bill — Presented  in  the 
U.  S.  Senate  January  10,  1887. 

To  the  Senators  and  Representatives  in  Congress  from  Minnesota: 

Gentlemen:  The  Minneapolis  Board  of  Trade,  at  its  regular  meet- 
ing of  December  22,  1886,  unanimously  adopted  the  following  resolu- 
tions : 

"Resolved,  That  while  this  Board  of  Trade  fully  approves  the  gen- 
eral principle  of  national  legislation  for  the  control  and  regulation  of  our 
inter-state  carrying  trade,  and  while  in  the  main  it  concurs  in  the  provis- 
ions of  the  compromise  bill  now  pending  before  Congress,  it  thoroughly 
disapproves  and  deprecates  the  provisions  .of  section  4,  relating  to  what 
is  known  as  the  long  and  short  haul,  and  of  section  5,  relating  to  pool- 
ing arrangements  between  parallel  or  competing  railway  lines.  In  the 
judgment  of  this  board,  section  4,  if  enacted,  would  give  to  the  proposed 
national  commission  powers  whose  exercise  would  always  be  dangerous 
and  might  easily  become  destructive  to  the  interests  of  the  distinctively 
agricultural  sections  of  the  country. 

"  Resolved,  That  a  committee  be  appointed  with  instructions  to  for- 
ward the  foregoing  resolution  to  our  Senators  and  Representatives  to  Con- 
gress, accompanied  with  a  letter  of  transmission  which  shall  more  fully 
set  forth  the  views  of  this  board." 

In  forwarding  these  resolutions  to  you,  permit  the  undersigned,  as 
the  committee  appointed  for  the  purpose,  to  call  your  attention  to  the  fol- 
lowing brief  summary  of  objections,  which,  in  the  judgment  of  our  Board 
of  Trade,  lie  against  sections  4  and  5  of  the  pending  inter-state  commerce 
bill,  and  respectfully  to  express  the  opinion  that  you  can  in  no  way  ren- 
der a  more  important  or  timely  service  to  your  constituents  than  by 
aggressively  helping  to  secure  the  omission  of  these  sections  from  the 
measure  before  it  becomes  a  law.  Allow  us  also  in  passing,  to  remind 
you  of  the  fact  that,  of  the  entire  membership  of  the  Minneapolis  Board 
of  Trade,  representing  all  leading  branches  of  legitimate  business  and 
productive  industry,  not  half  a  dozen  have  any  pecuniary  interests  in 
railroads,  direct  or  indirect,  and  we  do  not  know  of  half  that  number 
who  are  so  interested.  The  board  speaks  for  the  producers  and  shippers 
of  the  Northwest.  Further,  it  is  fully  recognized  that  national  supervision 
of  our  railroad  system  is  necessary  and  best,  in  the  interests  both  of  the 
people  and  of  the  railways  themselves  ;  that  this  supervision  has  already 
been  too  long  delayed  ;  that  there  are  wrongs  to  be  righted  and  corporate 
abuses  to  be  corrected,  and  that  the  pending  inter-state  commerce  bill, 
when  duly  amended,  will  constitute  a  wise  first  step  in  the  right  direc- 

189 


140  INTER -STATE    COMMERCE    LAW. 

tion.  It  is  simply  insisted  that  a  measure  which  is  necessarily  experi- 
mental and  which  deals  with  the  most  complicated  and  far-reaching 
commercial  problems  knowj}  to  mankind,  vitally  affecting  the  interests 
of  every  class  and  of  every  section,  should  not  go  so  far,  or  attempt  so 
much,  at  the  outset,  as  to  cause  infinite  damage  where  it  might  accom- 
plish unmeasured  good. 

(1.)  Section  4,  relating  to  the  "long  and  short  haul,"  is,  intention- 
ally or  unintentionally,  vague  and  ambiguous  in  its  language.  If  en- 
acted into  law  its  interpretation  by  the  courts  must,  therefore,  be  wholly 
uncertain,  its  practical  application  doubtful,  and  some  of  its  effects  im- 
possible to  predict.  This  is  sufficiently  shown  beforehand  by  the  known 
fact  that  scarcely  two  persons  understand  the  section  alike — even  zealous 
advocates  of  the'bill,  as  it  stands,  differing  widely  as  to  the  real  meaning 
and  intent  of  the  words  employed. 

(2.)  Assuming  that  the  section  means  what  its  lauguage  naturally 
imports,  the  consequence  of  enforcing  such  a  law  would,  we  believe,  be 
gravely  injurious  to  many  important  interests  in  all  parts  of  the  country, 
but  especially  would  such  enforcement  prove  destructive  in  its  effect 
upon  the  great  agricultural  section,  of  which  our  own  State  forms  so 
important  a  part. 

It  would  very  greatly  increase  the  cost  to  our  people  of  heavy  com- 
modities of  all  kinds  which  are  brought  in  from  Eastern  sections,  includ- 
ing coal,  without  which  our  prairie  farms  could  not  be  occupied. 

It  would  ruinously  depreciate  the  value  of  every  bushel  of  wheat  and 
every  pound  of  beef  produced  in  Minnesota,  by  compelling  the  railroads 
to  adopt  a  freight  tariff  on  through  shipments  eastward,  which,  if  not 
prohibitory,  would  leave  to  our  farmers  no  reward  for  their  labor  and 
invested  means. 

It  would  depress  manufacturing  industries  and  deprive  many  work- 
ing men  of  employment. 

It  would  reduce  to  a  minimum  the  trade  of  the  Northwest  by  largely 
destroying  the  purchasing  ability  of  our  producers. 

It  would  drive  a  large  share  of  the  long-distance  traffic  from  Ameri- 
can to  Canadian  lines. 

It  would  cripple,  if  it  did  not  bankrupt,  many  railroads,  by  com- 
pelling them  to  relinquish  a  large  part  of  either  their  through  or  their 
local  traffic — both  of  which  are  essential  to  their  solvency. 

The  very  people  who  ought  to  derive  most  benefit  from  legislation  of 
this  general  character — the  farmers  and  wage  earners  of  the  country — 
would  be  the  first  and  greatest  sufferers  from  its  injurious  effects. 

(3)  It  is  not  a  sufficient  answer  to  sajT  that  the  bill  gives  to  the  pro- 
posed commission  discretionary  power  to  avert  these  otherwise  inevitable 
calamities.  The  ambiguity  of  language,  already  mentioned,  renders  it 
doubtful  whether  this  power  is  fully  given;  and  even  if  it  is  conferred, 
its  exercise  would  be  a  most  unnecessary  and  dangerous  prerogative  to  be 
vested  in  any  untried  commission,  however  able  and  disinterested,  under 
an  untried  statute,  in  a  difficult  field,  where  national  legislation  is  now 
making  its  first  tentative  venture.  At  best,  it  gives  to  five  men,  about 
whose  competency,  experience,  and  integrity  nothing  can  be  known  in 
advance,  almost  autocratic  power  over  the  market  value  of  hundreds  of 
millions  of  dollars  of  railway  stocks  and  bonds,  over  the  market  value  of 


INTER -STATE    COMMERCE    LAW.  141 

the  agricultural  products  of  half  a  continent,  as  well  as  of  the  lands 
upon  which  these  products  are  grown. 

So  great  a  power  and  so  tremendous  a  temptation  to  its  abuse  ought 
not  to  be  presented  unnecessarily  to  any  committee  of  citizens  or  be  made 
the  foot-ball  of  politics.  Besides,  so  enormous  would  be  the  task  under- 
taken, and  so  extensive  its  domain,  that  no  commission,  however  capable, 
could  successively  consider  and  adjust  the  inevitable  frictions  and  con- 
troversies in  time  to  prevent  the  predicted  evils,  if  those  evils  in  fact 
impend. 

(4)  Section  5,  which  arbitrarily  prohibits  the  pooling  of  railway  earn- 
ings,is  not  less  objectionable  than  section  4.  It  proceeds  upon  the  assump- 
tion that  an  amicable  apportionment  of  traffic  among  substantially  parallel 
railway  lines  destroys  wholesome  competition,  creates  a  "monopoly," 
results  in  exorbitant  transportation  charges,  and  thus  wrongs  the  general 
body  of  producers,  shippers,  and  consumers,  who  constitute  the  people. 
With  exceptions  so  rare  as  only  to  prove  the  rule,  this  assumption  is  a  fal- 
lacy, and  legislation  based  upon  it  must  prove  a  hurtful  blunder.  The 
facts  are  that  such  apportionments  of  traffic  are  a  natural  and  necessary 
outgrowth  of  the  development  of  our  national  transportation  system; 
that  they  constitute  the  only  plan  of  self-preservation  for  railroads  which 
time  and  thought  and  experience  have  been  able  to  evolve  from  a  most 
difficult  and  perplexing  situation;  that  they  are  the  only  known  and  feasi- 
ble alternative  for  that  system  of  cut-throat  competition  which  foments 
chronic  "rate-wars,"  and  which,  unless  held  in  check,  would  end  in  the 
bankruptcy,  first  of  the  weak  lines,  and  then  of  the  strong  ones — for  a 
bankrupt  railway,  having  no  responsibility  to  bondholders  or  sharehold- 
ers, is  the  most  reckless  and  destructive  of  competitors.  These  adjust- 
ments and  divisions  of  traffic,  known  as  railway  pools,  do  not  raise  trans- 
portation charges  above  a  reasonable  level.  Almost  without  exception 
they  have  resulted  in  holding  rates  steadily  at  the  lowest  point  at  which 
the' business  can  be  done  at  a  living  profit.  This  is  notably  illustrated 
just  now,  as  you  are  aware,  in  our  own  section.  Never  was  there  a 
closer  pooling  arrangement  between  trunk  lines  than  that  which  now 
exists  between  the  six  roads  leading  from  Minneapolis  to  Chicago  yet  never 
were  freight  tariffs  so  low  as  at  the  present  time,  and  never  were  the  peo- 
ple better  accommodated. 

The  well-known  fact  that,  concurrently  with  the  development  of  the 
railway  pooling  system,  railway  rates  have  steadily,  greatly,  and  every- 
where decreased  is  a  summary  refutation  of  the  whole  theory  on  which 
section  5  is  founded. 

The  pooling  or  apportionment  system,  besides  preserving  railways 
from  insolvency,  and  railway  investments  from  destruction,  directly  bene- 
fits every  business  community  by  giving  some  degree  of  uniformity  and 
stability  to  transportation  charges,  and  thus  enabling  business  men  to 
shape  their  course  with  greater  certainty  and  safety.  A  railway  rate 
war,  although  it  temporarily  reduces  the  market  price  of  transportation 
below  actual  cost,  is  universally  and  justly  regarded  as  a  misfortune  to 
all  legitimate  lines  of  trade.  Obviously  it  is  of  no  advantage  to  the 
public  to  enjoy  any  service  at  less  than  its  reasonable  cost,  including  a 
fair  return  upon  the  capital  invested  in  rendering  that  service.  The  rule 
of  unregulated  and  unreasoning  competition,   followed  by  the  "survival 


142  INTER- STATE    COMMERCE    LAW. 

of  the  fittest,"  when  applied  to  railroads,  means  their  own  ruin,  with 
resulting  calamity  to  every  other  business  interest  which  is  worth  preserv 
ing. 

The  railway  pool,  honestly  administered,  is  the  natural  balance-wheel 
of  interstate  commerce.  Section  5  of  the  pending  bill  does  not  provide 
or  suggest  any  substitute  for  this  regulative  and  conservative  agency.  On 
the  contrary,  it  would  seem  to  render  commercial  chaos  legally  obligatory. 

(5)  It  is  not  a  sufficient  answer  to  say  that  if  found  to  be  injurious  in 
their  working,  these  provisions  may  be  repealed  at  the  next  session  of 
Congress.  The  mischief  that  can  be  accomplished  by  their  operation 
during  a  single  business  season  is  simply  immeasurable,  and  there  is  not 
the  slightest  necessity  for  assuming  the  risk. 

The  interstate  commerce  bill  has  adequate  scope  for  its  initial  pur- 
pose without  including  the  sections  to  which  objection  is  here  made. 
Omitting  these,  the  bill  lays  the  broad  foundation  of  a  system  of  salutary 
legislation,  which  ta  little  time  and  experience  will  develop  and  perfect. 
It  is  evolution,  and  not  revolution,  that  the  situation  calls  for.  Such  a 
policy  will  avoid  the  risk  of  serious  and  disastrous  mistakes;  at  least  it 
will  not  invite  that  demoralization  of  now  reviving  business,  that  shock 
to  commercial  confidence,  that  stagnation  of  enterprise,  that  aggravation 
of  the  labor  difficulties,  that  wholesale  depreciation  and  destruction  of 
values  which  many  competent  and  disinterested  students  of  the  problem 
foresee  in  case  the  bill  becomes  a  law  in  its  present  form.  The  panic  of 
1873  was  precipated  and  intensified,  if  it  was  not  largely  caused,  by 
injurious  State  legislation  affecting  railroads,  hastily  enacted  in  response  to 
unreasonable  clamor.  It  would  seem  to  be  hardly  the  part  of  wisdom  or 
of  statemanship  to  incur  even  the  liability  of  repeating  that  experience, 
and  on  a  larger  scale  during  the  present  century. 

With  great  respect,  your  obedient  servants, 

A.  B.  Nettleton, 
H.  A.  Towne, 
Edmund  J.  Phelps, 
T.  B.  Walker, 

Minneapolis,  Minn.,  January  5,  1887.  Committee. 


MR.  ALBERT  FINK  ON  THE  NEW  LAW. 

Commissioner  Albert  Fink,  in  February,  1887,  made  public  the  fol- 
lowing careful  analysis  of  the  principal  features  of  the  interstate  com- 
merce law,  as  he  construes  it: 

In  order  to  determine  whether  the  present  tariffs  of  the  railroad 
companies  comply  with  the  requirements  of  the  law  regulating  inter- 
state commerce,  and,  if  not,  what  changes  are  necessary,  it  is  of  the 
greatest  importance  to  obtain  a  correct  interpretation  of  the  sections  of 
the  law  bearing  on  the  establishment  of  tariffs.  This  interpretation 
must  be  made  in  accordance  with  the  language  of  the  law,  and  not 
according  to  any  explanation  of  it  given  while  the  interstate  commerce 
bill  was  under  consideration  in  congress. 

Sections  1,  2  and  3  of  the  act  prescribe  the  general  principles  upon 
which  transportation  charges  should  be  made,  but  they  do  not  specify 
and  direct  how  these  principles  shall  be  carried  into  practical  effect,  The 
law  requires  that  rates  shall  be  just  and  reasonable,  but  does  not  say 
what  constitutes  just  and  reasonable  rates.  This  is  left  to  the  carriers 
to  decide— a  difficult  task,  considering  that  the  problem  is  to  make  just 
and  reasonable  tariffs  over  130,000  miles  of  railroad  owned  and  operated 
by  so  many  different  independent  companies,  whose  co-operation  in 
making  reasonable  joint  through  tariffs  is  absolutely  necessary. 

In  questions  so  complicated  and  of  such  great  diversity  of  character, 
the  judgment  of  different  parties  may  honestly  differ,  and  yet  should  it 
be  found  that  the  honest  judgment  of  the  railroad  managers  differs  from 
the  judgment  of  the  commissioners  or  the  courts,  in  matters  requiring 
expert  knowledge,  the  railroad  companies  are  liable  under  the  law  to 
heavy  penalties,  although  they  knew  not  beforehand  what  the  law 
requires  of  them.  The  railroad  companies  find  themselves  placed  in  a 
most  difficult  position.  They  can  not  stop  the  operation  of  their  roads 
until  they  ascertain  what  the  law  means  and  what  they  are  to  do  under 
is,  but  they  have  to  interpret  it  as  best  they  can,  and  run  the  risk  of 
being  punished  for  putting  a  different  construction  upon  it  from  the 
construction  which  may  hereafter  be  given  by  the  commission  and  the 
courts. 

I  propose  to  interpret  the  law  strictly  in  accordance  with  its  lan- 
guage, and,  where  that  is  ambiguous,  to  solve  the  doubt  by  keeping  in 
mind  the  object  for  which  the  law  was  passed.  This  object  is  clearly 
expressed  in  sections  1,  2  and  3 — there  can  be  no  misunderstanding  about 
it,  viz.,  the  transportation  charges  of  the  railroad  shall  be  reasonable  and 
just. 

I  shall  first  deal  with  section  4,  regulating  the  charges  for  long  and 
short  hauls.  While  sections  1,  2  and  3  lay  down  the  general  principles 
upon  which  tariffs  are  to  be  established,  section  4  is  the  only  one  in 

143 


144  INTER- STATE    COMMERCE    LAW. 

which  it  is  attempted  to  lay  down  a  specific  rule,  but  it  is  so  indefinite 
that  it  admits  of  different  constructions.  The  first  part  of  this  section 
reads  as  follow  —  omitting  the  clause:  "  under  substantially  similar  cir- 
cumstances and  conditions." 

"That  it  shall  be  unlawful  for  any  common  carrier  subject  to  the 
provisions  of  this  act  to  charge  or  receive  any  greater  compensation  in 
the  aggregate  for  the  transportation  of  passengers,  or  of  like  kind  of 
property,  for  a  shorter  than  for  a  longer  distance  over  the  same  line,  in 
the  same  direction,  the  shorter  being  included  in  the  longer  distance." 

There  could  be  no  misconstruction  put  upon  this  part  of  the  section, 
as  it  is  an  absolute  prohibition  of  charging  more  for  a  shorter  than  for  a 
longer  distance;  but  by  introducing  the  clause  "under  substantially  simi- 
lar circumstances  and  conditions,"  this  prohibition  is  qualified;  and  it 
may  be  lawful  under  dissimilar  circumstances  and  dissimilar  conditions 
to  charge  more  for  a  shorter  than  for  a  longer  distance.  The  law  does 
not  specify  what  circumstances  and  conditions  would  justify  a  greater 
charge  for  a  shorter  than  for  a  longer  haul,  and  we  must,  therefore, 
inquire  what  are  the  different  circumstances  and  conditions  referred  to 
which  justify  an  exception  to  the  general  rule. 

These  circumstances  and  conditions  must  necessarily  be  such  as  to 
legitimately  influence  the  relative  charges  for  long  and  short  hauls.  The 
law  can  not  mean  any  other  circumstances  and  conditions.  It  can  not 
refer  to  extraneous  matters,  as,  for  example,  to  the  conditions  of  the 
weather,  whether  it  rains  or  snows,  or  whether  it  is  hot  or  cold,  but  it 
must  refer  to  the  conditions  and  circumstances  which  from  the  very 
nature  of  the  case  control  transportation  charges;  and  the  principal 
elements  that  control  transportation  charges  are  the  cost  of  the  service 
and  competition,  using  the  word  "  competition"  in  its  widest  sense  — 
competition  with  water  routes,  competition  with  rail  routes,  competition 
between  markets,  etc.  These  are  the  main  factors  regulating  transporta- 
tion charges,  and  have  done  so  at  all  times  in  this  and  all  other  countries. 
It  must,  therefore,  be  these  conditions  and  circumstances  to  which  refer- 
ence is  had  in  this  clause. 

If  it  can  be  shown,  for  example,  that  it  costs  a  railroad  more  to  c  :rry 
freight  for  fifty  miles  over  its  road  than  it  costs  to  carry  the  same  kind 
and  quantity  of  freight  one  hundred  miles,  this  clause  would  be  an 
authorization  for  charging  more  for  the  fifty  mile  service  than  for  the 
one  hundred  mile  service;  or,  if  it  can  be  shown  that  the  rate  to  the  end 
of  the  one  hundred  miles  of  road  is  fixed  by  water  transportation,  hardly 
sufficient  to  pay  the  railroad  the  cost  of  doing  the  work,  without  any  or 
without  an  average  profit  in  the  capital  invested  in  the  road,  the  railroad 
company  would  be  justified  in  making  a  lower  rate  to  the  station  one 
hundred  miles  distant  than  it  does  to  the  station  fifty  miles  distant,  pro- 
vided, however,  that  the  rate  to  the  fifty  mile  station  is  reasonable  in 
itself  —  not  as  low  as  the  cost  of  water  transportation  would  be,  but  not 
higher  than  the  cost  of  railroad  operation  and  a  reasonable  interest  on  the 
cost  of  the  road.  The  shippers  at  the  one  hundred  mile  station  enjoy  the 
natural  advantages  of  their  location  on  a  navigable  river,  while  those  who 
live  in  the  interior  are  necessarily  under  disadvantages.  This  discrimina- 
tion exists  in  the  nature  of  things  —  it  is  not  unjust;  it  is  not  the  result  of 
the  arbitrary  action  of  the  railroad  transportation  companies,  who  are 
compelled  to  regulate  their  charges  in  accordance  with  the  circumstances 


INTER -STATE    COMMERCE    LAW.  145 

and  conditions  of  the  situation  as  they  find  them.  The  railroad  company 
would  prefer  not  to  make  the  lower  charge  for  the  long  haul,  but  to 
assess  the  people  along  the  line  of  the  road  ratably,  according  to  the  dis- 
tance which  freight  is  carried  ;  but  this  is  rendered  impossible  by  the 
very  nature  of  the  case  when  railroads  compete  with  water  routes, 
because  of  the  cheaper  cost  of  transportation  by  water  than  by  rail. 

In  all  cases,  therefore,  where  the  cost  of  the  service  and  legitimate 
competition  justify  a  higher  charge  for  a  shorter  haul  than  for  a  longer, 
section  4  does  not  prohibit  it,  but  the  charge  for  the  short  haul  must,  of 
course,  come  within  the  restriction  laid  down  in  section  1 — viz.,  it  must 
be  reasonable  and  just. 

Assuming  that  this  interpretation  of  the  first  clause  of  section  4, 
down  to  the  proviso,  is  correct,  the  question  will  be  asked,  what  mean- 
ing is  to  be  attached  to  the  proviso,  which  reads: 

Provided,  however,  that  upon  application  to  the  commission 
appointed  under  the  provisions  of  this  act,  such  common  carrier  may,  in 
special  cases,  after  investigation  by  the  commission,  be  authorized  to 
charge  less  for  longer  than  for  shorter  distances  for  the  transportation  of 
passengers  or  property;  and  the  commission  may  from  time  to  time  pre- 
scribe the  extent  to  which  such  designated  common  carrier  may  be 
relieved  from  the  operation  of  this  section  of  this  act. 

In  order  to  properly  interpret  the  meaning  of  the  proviso,  which 
does  not  seem  quite  in  harmony  with  the  first  part  of  the  section,  it  is 
necessary  to  bear  in  mind  that  the  original  bill  as  reported  by  the  Senate 
committee  to  the  Senate  did  not  contain  in  the  first  part  of  the  fourth 
section  the  qualifying  clause,  "  under  substantially  similar  circumstances 
and  conditions."  It  made  the  prohibition  of  charging  "more  for  a  short 
haul  than  for  a  long  haul  absolute;  but  it  is  obvious  that  the  enforcement 
of  such  a  rule  would  result  in  great  injury  to  the  commerce  of  the  coun- 
try. Discretion  was  therefore  given  to  the  commission  in  the  proviso  to 
suspend  its  operation;  but  it  is  evident  that  after  the  qualifying  clause, 
"under  substantially  similar  circumstances  and  conditions,"  had  been 
inserted  by  the  Senate  in  section  4,  there  was  no  longer  any  necessity  for 
the  proviso,  as  no  further  exemption  is  needed  for  the  operation  of  the 
first  part  of  the  section  as  amended  by  the  Senate.  Bearing  this  in  mind, 
and  reading  the  proviso  in  connection  with  the  first  part  of  the  section,  it 
can  only  mean  that  in  cases  where  the  circumstances  and  conditions  are 
similar  the  commission  may  relieve  the  carriers  from  the  operation  of  the 
rule  when  application  for  such  relief  is  made.  Should  no  such  applica- 
tion be  made,  the  commission  have  no  cause  for  action  under  the  proviso. 

The  qualifying  clause  in  the  fourth  section,  "under  substantially 
similar  circumstances  and  conditions,"  therefore  leaves  the  determination 
of  whether  a  greater  charge  can  justly  be  made  for  a  shorter  haul  than 
for  a  longer,  under  different  circumstances  and  conditions,  to  the  judg- 
ment of  the  carriers,  in  the  first  place,  to  be  finally  passed  upon  by  the 
courts.  Section  4,  therefore,  does  not  prescribe  a  more  definite  rule  than 
section  1,  by  which  the  carriers  could  be  guided  in  determining  in  all 
cases  what  are  reasonable  and  just  charges.  That  section  might  there- 
fore have  been  omitted  altogether,  as  it  conveys  no  other  meaning  than 
that  which  is  already  expressed  in  section  1;  viz.,  that  the  railroad 
charges  shall  be  reasonable  and  just. 


146  INTER -STATE    COMMERCE    LAW. 

There  can  be  no  doubt  that  the  above  is  the  correct  interpretation  of 
section  4 ;  it  fully  carries  out  the  intent  and  object  of  the  law.  If  the 
long  and  short  haul  rule  had  been  made  absolute,  it  is  obvious  that  the 
very  object  of  the  law  could  not  have  been  attained  ;  instead  of  regulat- 
ing commerce  the  law  would  have  obstructed  it :  instead  of  preventing 
unjust  discrimination  it  would  have  created  it ;  it  would  have  stifled 
competition  with  water  lines  and  increased  the  transportation  rates  ;  it 
would  have  deprived  the  people  of  facilities  to  ship  to  distant  markets. 
These  evils  could  not  have  been  prevented  by  the  exercise  of  the  com- 
missioner's power  to  exempt  the  carrier  from  the  operation  of  the  long 
and  short  haul  rule,  because  it  would  have  been  an  impossible  task  for 
the  commission  to  investigate  and  decide  the  numerous  cases  that  would 
come  before  them.  The  commission  could  not  exempt  any  one  railroad 
or  line  from  the  operation  of  the  long  and  short  haul  rule  without  at  the 
same  time  giving  relief  to  all  other  railroads  whose  tariffs  are  affected 
thereby  ;  otherwise,  great  injustice  would  be  done  both  to  the  railroads 
and  to  business  communities.  It  certainly  was  not  the  intention  of  the 
law  to  throw  the  transportation  business  of  the  whole  country  into  con- 
fusion, which  would  be  the  result  if  section  4  were  interpreted  to  make 
the  long  and  short  haul  rule  absolute  and  only  subject  to  suspension  by 
the  commission. 

In  case  of  a  doubt  as  *to  the  proper  construction  and  meaning  of  the 
law,  it  must  be  construed  by  the  carriers  in  accordance  with  the  avowed 
and  clearly  expressed  purpose  of  the  law,  and  not  in  opposition  to  it ; 
otherwise,  the  carriers  would  lay  themselves  open  to  the  imputation  that 
they  did  so  for  the  purpose  of  making  the  law  obnoxious.  Between  the 
two  alternatives— either  to  fail  to  construe  the  law  as  it  ma}'  finally  be 
construed  by  the  courts,  or  to  construe  it  in  a  way  that  would  avoid  this 
risk  but  result  in  the  obstruction  of  commerce — the  right  course  to  pur- 
sue, it  seems  to  me,  would  be  to  construe  it  with  a  view  to  carrying  out 
the  object  and  intent  of  the  law,  trusting  that  such  construction  will 
finally  be  sustained  by  the  court, 

We  now  come  to  the  consideration  of  section  2,  upon  which  differ- 
ent and  contradictory  constructions  are  placed.  It  contains  the  follow- 
ing provision  : 

That  no  common  carrier  coming  under  the  provisions  of  this  act 
shall  charge,  demand,  collect  or  receive  from  any  person  or  persons  a 
greater  or  less  compensation  for  any  service  rendered  or  to  be  rendered 
in  the  transportation  of  passengers  or  property,  subject  to  the  provisions 
of  this  act,  than  it  charges,  demands,  collects  or  receives  from  any  other 
person  or  persons  for  doing  for  him  or  them  a  like  and  contemporaneous 
service  in  the  transportation  of  a  like  kind  of  traffic  under  substantially 
similar  circumstances  and  conditions. 

Here,  again,  the  question  arises  as  to  what  are  the  circumstances  and 
conditions  referred  to,  which,  if  dissimilar,  justify  different  charges  for 
the  same  service  performed ;  and  the  answer  is,  that  they  are  circum- 
stances or  conditions  which  legitimately  influence  and  control  transporta- 
tion charges — the  cost  of  the  service  and  competition,  as  before  explained. 
Taking,  for  illustration,  a  specific  case,  that  of  the  Boston  and  Albany 
Railroad  receiving  at  Albany  four  car  loads  of  freight,  one  originating  at 
Albany,  the  others  at  Chicago,  St.  Louis  and  Cincinnati  respectively, 


INTER -STATE    COMMERCE    LAW.  147 

and  all  destined  to  Boston.  The  question  lias  been  raised  whether  the 
Boston  and  Albany  Railroad  is  obliged,  under  section  2,  to  charge  pre- 
cisely the  same  for  hauling  each  car  load  to  Boston,  or  whether  the  cir- 
cumstances and  conditions  differ  so  as  to  justity  different  charges  for 
each  car  load.  In  order  to  decide  this  question  we  must  consider  the 
present  practice  of  the  railroads  in  conducting  the  transportation  business 
over  two  or  more  roads.  The  railroads  have  agreed  with  each  other  to 
establish  through  rates  and  fares  all  over  the  country,  to  issue  through 
bills  of  lading,  and  sell  through  tickets.  Instead  of  shippers  and  passen- 
gers having  to  make  their  own  arrangements  with  each  of  the  carriers 
whose  road  they  want  to  use,  the  carriers  subject  to  the  provisions  of  this 
law  have  voluntarily  associated  themselves  to  act  for  each  other  as  for- 
warders and  agents,  so  that  parties  desiring  to  use  many  roads  practically 
have  to  deal  with  only  one,  and  every  possible  facility  and  convenience 
to  the  public  is  thus  offered.  It  is  necessary  to  speak  of  these  great  serv- 
ices which  the  railroad  companies  are  rendering  to  the  public  by  their 
voluntary  co-operation  because  these  arrangements  have  given  rise  to  the 
system  known  as  •'pro-rating,"  by  which  each  road  agrees  to  take  for 
its  compensation  for  the  service  it  renders  a  certain  portion  of  the  through 
rate  which  may  have  been  established  between  certain  shipping  points. 
These  through  rates  are  not  under  the  control  of  each  individual  railroad 
company,  as  the  local  rates  are;  they  are  adjusted  in  accordance  with  the 
laws  of  trade  and  competition,  and  it  may  here  be  remarked  that  the 
present  established  through  rates  are  in  accordance  with  the  principles 
laid  down  in  section  1  of  the  law — they  are,  as  a  general  rule,  reasonable 
and  just. 

The  share  of  a  through  rate  which  a  road  may  receive  is  generally 
determined  by  the  relative  distance  over  which  it  carries  the  freight,  as  com- 
pared with  the  total  distance.  It  is  evident  that  this  proportion  must 
vary  as  the  through  rate,  the  total  length  of  the  route,  and  the  length  of 
each  road  in  the  route  vary.  For  this  reason  it  may  happen  under  the 
practice  of  through  billing  that  the  Boston  and  Albany  Railroad  will  re- 
ceive a  less  compensation  for  a  car  load  of  freight  from  Cincinnati  than 
for  one  coming  from  Chicago  or  St.  Louis,  although  all  these  cars  may 
be  carried  over  its  road  on  the  same  train.  This  is  in  the  nature  of  the 
case.  It  is  a  condition  Avhich  is  imposed  upon  each  road  by  being  a  party 
to  joint  rates  on  through  shipments,  in  accordance  with  the  present  prac- 
tice of  the  railroads  in  this  and  all  other  countries. 

Is  this  practice  to  be  declared  illegal  by  the  second  section  of  the 
law?  There  can  be  no  doubt  that  if  this  section  did  not  contain  the 
qualifying  clause  "  under  substantially  similar  circumstances  and  conti- 
tions,"  it  would  forbid  the  practice  of  prorating,  but  by  the  insertion  of 
this  clause,  and  taking  into  consideration  the  different  circumstances  and 
conditions  legitimately  influencing  the  rates,  apart  from  the  cost  of  the 
service,  different  rates  may  be  charged  for  the  same  service. 

Let  us  see  what  would  be  the  result  if  the  railroads  of  this  country 
were  required  under  this  law  to  make  the  same  charge  for  transporting 
similar  kind  and  quantity  of  freight  over  the  same  part  of  its  road, 
regardless  of  the  circumstances  and  conditions  above  referred  to.  Each 
road  would  then  have  to  charge  its  local  rates  on  all  traffic.  The  through 
rates  from  and  to  the  various  points  in  the  country  would  be  the  sum  of 


148  INTER -STATE    COMMERCE    LAW. 

the  locals  of  the  different  roads  in  the  line.  They  would  necessarily  be 
much  higher  than  they  are  now,  and  they  would  be  different  by  different 
routes,  instead  of  being  uniform  between  the  same  points  of  shipment, 
as  they  are  at  present.  It  would  deprive  the  public  of  the  advantages 
they  now  enjoy  by  reason  of  the  through  arrangements.  Rates  from 
distant  points  would  necessarily  be  so  high  that  it  would  stop,  in  a  great 
measure,  the  export  business,  and  while  the  railroads  would,  perhaps,  be 
fully  compensated  for  this  loss  by  getting  higher  local  rates  on  domestic 
business,  the  people  would  be  great  sufferers.  If  such  a  state  of  affairs 
were  to  continue  long  it  would  bring  ruin  to  this  country.  This  would 
inevitably  be  the  result  if  the  qualifying  clause  that  different  charges 
may  be  made  for  the  same  service  under  different  circumstances  and 
conditions,  had  not  been  inserted;  and  it  also  must  be  clear  that  the 
words  ' '  circumstances  and  conditions  "  mean  not  only  the  cost  of  the 
service,  but  competition  and  all  other  conditions  legitimately  influencing 
transportation  charges,  such  as  I  have  mentioned  in  connection  with  the 
through  business;  and  it  will  be  seen  that  these  circumstances  and  con- 
ditions are  of  such  great  importance  that  the  prosperity  of  the  country 
may  depend  upon  their  having  due  consideration  in  the  execution  of  this 
law. 

There  should,  therefore,  be  no  doubt  entertained  that  under  section 
2  the  railroads  can  make  different  charges  for  the  same  service  performed, 
if  it  is  performed  under  different  circumstances  and  conditions  legiti- 
mately controlling  the  charges. 

Having  shown  that  under  section  2  a  railroad  may  make  different 
charges  under  dissimilar  circumstances  and  conditions  for  hauling  the 
same  kind  and  quantity  of  freight  over  the  same  portion  of  its  road,  the 
question  may  be  raised  as  to  whether,  under  section  4,  the  maximun 
charge  for  a  short  haul  on  a  railroad  is  to  be  determined  by  the  local 
rate  charged  for  a  long  haul  on  the  same  road,  or  by  the  lowest  compen 
sation  such  a  road  may  receive  as  its  share  of  a  through  rate.  It  must 
be  observed  that  the  law  nowhere  deals  with  the  share  of  a  through  rate, 
but  only  with  the  rates  in  the  aggregate,  and  properly  so,_  because  the 
shippers  are  only  concerned  with  the  aggregate  charge  which  they  have 
to  pay,  and  not  with  a  share  of  &  through  rate  which  each  of  the  several 
railroads  forming  a  through  line  may  receive.  The  division  of  a  through 
rate  is  a  matter  of  private  agreement  between  the  railroads,  and  does  not 
affect  the  public.  If  the  through  rates  in  the  aggregate  conform  to  the 
law,  that  is  all  that  the  law  requires. 

This  view  of  the  case  is  further  supported  by  that  section  6,  provid- 
ing for  the  publication  of  rates  makes  a  distinction  between  the  tariffs 
of  each  railroad  (a  word  defined  in  section  1  as  meaning  "  all  the  road 
in  use  by  any  corporation  operating  a  railroad,  whether  owned  or  oper- 
ated under  a  contract,  agreement  or  lease  ")  and  the  through  tariffs — "the 
tariffs  that  any  common  carrier  ma}'  establish  in  connection  with  some 
other  road,  or' joint  tariffs."  It  is  made  compulsory  for  each  railroad 
company  to  publish  its  tariff  between  all  stations  on  its  own  road,  but  it 
is  left  optional  with  the  carriers  to  establish  joint  tariffs,  and  if  they  do 
the  same  must  be  reported  to  the  commission,  who  will  direct  whether  and 
to  what  extent  they  shall  be  published.  If  joint  tariffs  are  established 
by  the  carriers,  they  must  be  made  in  conformity  to  the  law.     No  more 


INTER -STATE    COMMERCE    LAW.  149 

must  be  charged  for  a  shorter  than  for  a  longer  haul  in  the  aggregate, 
over  the  same  line,  unless  different  circumstances  and  conditions 
justify  it- 
Attention  is  called  to  the  use  of  the  word  "line"  in  the  fourth  sec- 
tion, which  it  must  be  inferred  means  something  different  from  the  word 
"  railroad  "  as  defined  in  the  first  section  —  it  evidently  means  a  route  or 
line  formed  by  a  number  of  railroads  between  the  points  of  shipment  or 
destination;  and  the  joint  tariffs  of  such  line  can  only  refer  to  the  aggre- 
gate charges  made  to  the  public  and  published,  and  not  to  the  subdi- 
vision of  a  through  rate  between  the  several  roads  constituting  the  line. 
Indeed,  it  might  be  inferred  from  the  use  of  the  word  "line  "  in  section 
4,  and  the  omission  of  the  word  "  railroad"  from  this  section,  that  the 
long  and  short  haul  rule  applied  only  to  joint  tariffs  and  had  nothing  to 
do  with  the  tariffs  of  each  railroad,  much  less  with  the  share  of  the 
through  rate  each  railroad  may  receive.  For  these  reasons  it  seems  clear 
to  me  that  the  compensation  a  railroad  may  receive  as  its  share  of  the 
through  rate  is  not  to  influence  in  any  way  the  adjustment  of  rates  on 
long  and  short  hauls,  and  that  it  is  only  required  to  bring  the  total  or 
aggregate  rate  over  the  same  line  under  the  provisions  of  the  law. 

It  is  very  important  that  a  decision  should  be  reached  at  once  as  to 
the  proper  interpretation  of  the  second  and  fourth  sections  of  the  law, 
as,  until  this  is  done,  it  will  be  impossible  for  the  railroad  companies  to 
determine  whether  any  changes  are  necessary  in  their  present  tariffs  to 
make  them  conform  to  the  law. 

There  are  other  sections  of  the  law  requiring  interpretation,  but  I 
have  confined  this  paper  to  the  discussion  of  the  two  sections  affecting 
the  establishment  of  tariffs,  so  that  their  revision,  if  necessay,  may  be 
begun  at  once.  Albert  Fink. 


MR.    ALEXANDER     OPPOSES     MR.    FINK'S    VIEWS. 

On  February  22,  1887,  Mr.  E.  P.  Alexander,  president  of  the  Cen- 
tral Railroad  Company  of  Georgia,  wrote  the  following  criticism  of  Mr. 
Fink's  position: 

Savannah,  Ga.,  February  22,  1887. 
Mr.  Fink  very  clearly  states  that  the  interstate  commerce  law  is  to 
be  interpreted,  not  only  by  the  conflicting  explanations  given  by  differ- 
ent members  of  congress,  but  by  "its  language,  and,  where  that  is 
ambigious,  by  keeping  in  mind  the  object  for  which  the  law  was  passed." 
In  other  words,  when  we  have  followed  any  line  of  argument,  based 
upon  the  ambiguous  language  of  this  bill,  to  its  conclusion,  before 
accepting  this  conclusion,  we  must  examine  it  in  the  light  of  the  end  or 
object  which  congress  had  in  view  in  passing  the  law.  If  the  conclusion 
should  be  plainly  one  which  congress  did  not  have  in  view,  our  argument 
has  ended  in  "  a  reductto  ad  absurdum"  and  must  be  faulty  in  its  premi- 
ses, or  illogical  in  its  process. 

Applying  this  test  to  Mr.  Fink's  conclusion  on  section  4,  I  think  we 
are  confronted  with  just  that  result.  He  makes  of  section  4  an  absolute 
nonentity.  In  his  own  language,  in  drawing  his  conclusions,  "that  sec- 
tion might  have  been  omitted  altogether."  That  conclusion  alone  seems 
to  me  to  absolutely  refute  the  argument  leading  up  to  it. 

The  final  test  of  the  real  meaning  of  the  law  can  only  be  had  in 
a  court,  and  before  a  judge  and  jury.  It  seems  to  me  a  vain  hope  that 
such  a  tribunal  will  ever  accept  a  construction  of  this  law  which  will 
make  of  it — nothing — a  thing  which  "might  have  been  omitted 
altogether." 

And  going  over  the  argument  in  detail,  it  seems  to  me  that  the  fal- 
lacy in  the  premises  is  also  obvious.  It  is  not  stated  in  so  many  words, 
but  the  entire  argument  proceeds  upon  the  assumption  that  the  author 
and  supporters  of  this  bill  understood  the  results  which  must  follow  from 
abolishing  all  lower  rates  upon  longer  hauls  in  the  traffic  of  the  country. 
The  violence  of  such  an  assumption  can  hardly  be  exaggerated. 

Mr.  Fink  reasons  "  it  is  obvious  that  the  enforcement  of  such  a  rule 
would  result  in  great  injury  to  the  commerce  of  the  country."  But  that 
it  is  "obvious"  only  to  those  who  are  experts  in  the  business — who 
know  how  the  lower  rates  upon  longer  hauls  are  forced  upon  the  railroads 
by  circumstances  beyond  their  control.  To  the  average  citizen,  voter, 
and  legislator,  the  injury  to  result  from  prohibiting  a  less  charge  on  the 
longer  haul  is  not  only  not  "  obvious,"  but  he  absolutely  refuses  to  be  con- 
vinced of  it,  and  he  has  insisted  upon  passing  this  law  to  put  a  stop  to  the 
practice. 

An  interpretation  which  would  make  of  section  4  a  legalizing  of 
present  practices,  as  regards  long  and  short  hauls,  instead  of  an  effort  to 
change  them,  would  exactly  reverse  its  intent. 

The  protestations  of  railroad  men  and  experts,  and  their  predictions 
of  the  results  which  must  follow,  have  had  no  effect  beyond  inducing 


INTER- STATE    COMMERCE    LAW.  151 

the  proviso  to  section  4,  which  allows  the  commissioners  to  suspend  the 
operation  of  the  law  in  special  cases.  It  would  be  an  utterly  superfluous 
provision  if  it  were  intended  that  the  existence  of  competition,  at  the 
more  distant  point,  should  itself  justify  a  lower  rate.  Under  this  inter- 
pretation of  the  section,  it  is  impossible  to  imagine  an  actual  case  where 
there  would  be  need  for  a  commission  with  power  to  suspend  its  opera- 
tion. There  probably  never  was  a  case  of  charging  less  for  a  longer  haul 
but  under  constraint  of  competition,  and  I  can  not  conceive  of  any  other 
ground  upon  which  a  commission  would  or  should  authorize  it.  If  the 
authority  of  a  commission  is  not  needed  to  permit  it  under  competition, 
it  is  not  needed  at  all.  The  fact  that  a  commission  is  provided  proves 
conclusive^  that  this  tribunal  alone  can  authorize  a  less  charge  for  a 
longer  haul  under  ordinary  competition. 

The  plain  English  of  the  situation  seems  to  me  be}rond  doubt  or 
question.  The  author  and  supporters  of  this  bill  have  believed,  and  do 
believe,  that  the  railroads  can  and  will  reduce  their  short  haul  rates  rather 
than  abandon  their  long  haul  rates. 

And  they  have  forced  the  issue  upon  the  railroads  under  terrible  pen- 
alties. It  seems  to  me  vain  to  hope  to  escape  it  by  putting  an  interpreta- 
tion upon  the  law  which  would  make  of  it  but  a  jumble  of  words  means 
nothing.  The  "intent"  of  the  law  is  a  matter  of  public  notoriety,  and 
when  it  is  accepted  section  4  is  very  clear  and  emphatic  legislation. 

It  has  been  suggested  that  a  prompt  compliance  with  its  require- 
ments will  be  held  by  the  country  as  an  effort  on  the  part  of  the  railroads 
to  make  the  law  odious. 

I  do  not  see  how  it  can  be  so  regarded.  Not  to  comply  with  it, 
except  at  the  end  of  the  law,  can  more  justly  be  held  to  be  an  effort  to 
override  and  defy  it.  In  this  dilemma,  and  in  view  of  the  severe  penal- 
ties and  heavy  risks  attendant  upon  any  construction  which  can  not  be 
maintained  before  a  judge  and  jury,  there  seems  to  me  but  one  safe 
course  to  pursue.  Tariffs  should  be  at  once  prepared  conforming  to  the 
intent  of  the  law  as  generally  understood.  These  tariffs  should  be  imme 
diately  submitted  to  the  railroad  commission  provided  for  in  the  law  to 
meet  the  very  emergency  which  we  believe  is  upon  the  country.  The 
effect  of  abolishing  lower  charges  upon  longer  hauls  should  be  clearly 
pointed  out  to  the  commission,  and  their  authority  invoked  to  relieve 
from  the  operation  of  the  act  every  road  which  applies.  As  soon  as  any 
one  is  relieved,  the  relief  of  every  other  one  must  follow,  one  after 
another,  as  bricks  in  a  row  knock  each  other  down.  Otherwise  the  com- 
misson  would  be  guilty  of  palpable  and  unfair  discrimination  between 
equal  competitors.  And  unless  they  begin  promptly,  by  relieving  the 
lines  in  competition  with  Canadian  lines  from  the  operation  of  the  sec- 
tion, the  latter  lines  and  the  cities  of  Canada  will  take  off  business  legiti- 
mately belonging  to  the  United  States  to  an  extent  which  must  speedily 
educate  both  the  commission  and  the  people. 

To  this  result — the  education  of  the  people — or  at  least  of  the  law 
makers — we  must  come  before  there  can  be  peace  and  mutual  prosperity. 
It  seems  to  me  that  we  postpone  that  day  by  any  effort  to  evade  the  issue 
made  by  section  4. 

We  should  refuse  to  run  any  risks  of  the  penalties  of  the  law,  but 
promptly  and  frankly  accept  the  situation  and  place  the  whole  responsi- 
bility upon  the  railroad  commission.  E.  P.  Alexander. 


MR.  FINK'S    REPLY  TO  PRESIDENT    ALEXANDER. 


On  February  25,  1887,  Mr.  Albert  Fink  wrote  the  following  letter  to 
Gen.  E.  P.  Alexander,  in  reply  to  his  remarks  upon  Mr.  Fink's  interpre- 
tation of  section  4: 

New  York,  Feb.  25,  1887: 
Gen.  E.  P.  Alexander, 

President  Central  R.  R.  &  Banking  Co.  of  Georgia,  Savannah,  Ga. 

My  Dear  Sir:  I  have  your  favor  of  23d  hist.,  and  also  your  re- 
marks upon  my  interpretation  of  section  4  of  the  Interstate  Commerce 
law. 

I  am  afraid  you  have  not  fully  understood  me.  I  do  not  say  any- 
where that  section  4  amounts  to  nothing,  but  simply  that  it  amounts  to 
no  more  than  sections  1  and  3,  which  provide  that  rates  shall  be  reason- 
able and  just,  and  that  no  unjust  discrimination  shall  be  made  against 
localities;  and  that  by  the  insertion  of  the  clause,  "under  substantially 
similar  circumstances  and  conditions"  in  section  4,  it  permits  a  greater 
charge  being  made  for  a  short  haul  than  for  a  long  haul,  where  it  is  just 
and  reasonable. 

I  read  the  section  according  to  its  language  and  not  according  to  the 
interpretation  given  by  Mr.  Reagan  and  others,  and  it  seems  to  me  that 
you  contradict  yourself  when  you  say,  in  the  first  place,  that  you  pro- 
pose to  construe  the  section  by  its  language,  and  then  construe  it  by  what 
some  of  the  supporters  of  the  bill  intended  should  be  its  effect.  You 
say  "it  is  not  stated  in  so  many  words,"  but  you  interpret  the  bill  by 
what  you  think  some  of  its  authors  meant  it  to  be,  and  even  by  what  a 
portion  of  the  public  expect  it  to  be,  while  I  interpret  it  simply  by  its 
language. 

There  is  no  doubt  in  my  mind  that  some  of  the  supporters  of  the 
bill  meant  its  effect  to  be  what  you  state;  but  others  give  it  exactly  the 
same  interpretation  as  I  do  (Mr.  Cullom  for  example),  so  that  after  all 
you  will  have  to  fall  back  upon  the  language  of  the  law  and  not  upon 
what  those  gentlemen  intended  it  to  mean. 

Now,  this  brings  us  to  the  only  question  at  issue,  viz:  What  is  the 
meaning  of  the  clause,  "under  substantially  similar  circumstances  and 
conditions?"  I  have  endeavored  to  show  that  it  means  the  cost  of  the 
service  and  competition.  The  whole  question  is  simply  one  of  the  inter- 
pretation of  that  clause.  If  it  means  nothing,  then  I  think  the  long  and 
short  haul  rule  in  section  4  is  absolute,  and  can  only  be  varied  by  the 
Commission.  If  it  means  cost  and  competition,  then  the  railroad  com- 
panies are  obliged,  in  the  first  place,  to  put  a  construction  upon  it,  sub- 
ject, of  course,  to  the  final  ruling  of  the  Commission  and  the  courts. 
Each  railroad  company,  of  course,  is  at  liberty  to  interpret  that  clause  as 
it  chooses,  and  perhaps  the  general  disposition  is  to  be  on  the  safe  side, 


INTER -STATE    COMMERCE    LAW.  153 

and  say  that  it  means  nothing.  I  have  no  objection  to  that  interpreta- 
tion, but  I  believe  the  clause  means  a  great  deal,  and  that  only  by  plac- 
ing a  proper  construction  upon  it  can  the  Interstate  Commerce  law  be 
carried  into  effect  and  accomplish  reforms,  without  introducing  abuses. 

You  seem  to  have  determined  to  educate  the  people  by  placing  a 
rigid  construction  upon  section  4  that  will  revolutionize  the  transporta- 
tion business  of  the  country,  and  I  do  not  know  but  what  that  may  be  a 
good  plan;  but  it  does  not  seem  to  me  to  be  the  intent  and  spirit  of  the 
law,  as  it  reads,  although  it  may  have  been  the  intent  of  some  radical, 
ignorant  legislators  who  helped  frame  the  bill. 

In  an  opinion  given  by  Mr.  George  Davis,  counsel  of  the  Atlantic 
Coast  line,  which  Mr.  Walters  was  kind  enough  to  forward  to  me,  Mr. 
Davis  quotes  the  following: 

"A  statute  is  an  act  of  the  Legislature  as  an  organized  body.  It  expresses  the  collect- 
ive will  of  the  body,  and  no  single  member  of  it,  nor  all  the  members  as  individuals,  can 
be  heard  to  say  what  the  meaning  of  the  statute  is.  *  *  *  Whatever  may  be 
the  views  and  puri  oses  of  those  who  procure  the  enactment  of  a  statute,  the  Legislature 
contemplates  that  its  intention  shall  be  ascertained  from  its  words  as  embodied  in  it.  And 
courts  are  not  at  liberty  to  accept  the  understanding  of  any  individual  as  to  the  legislative 
intent." — State  v.  Psartlow,  91,  No.  C.  A  .   525. 

I  do  not  think  that  you  are  justified  in  interpreting  the  law  accord- 
ing to  the  views  entertained  by  Mr.  Reagan,  but  that  you  must  take  the 
language — and  that  does  not  justify  your  construction. 

I  think  you  have  entirely  misunderstood  me  when  you  say  that  I 
hold  that  section  4  legalizes  the  present  practice  as  regards  long  and 
short  haul  charges.  I  should  first  like  to  know  what  the  present  prac- 
tice is  before  expressing  such  an  opinion.  What  I  meant  was  that  where 
present  practice  is  in  accordance  with  the  intent  and  spirit  of  the  law 
and  where  the  rates  are  reasonable  and  just  it  may  be  continued;  where 
it  is  not,  it  must  be  abandoned;  and  I  have  no  doubt  that  when  the  rail- 
road companies  examine  into  their  present  practice,  they  will  find  it  nec- 
essary to  make  many  changes  in  their  tariffs  to  make  them  conform  to 
the  law;  but  why  should  they  make  any  changes  where  they  comply  with 
the  law  and  where  their  charges  are  reasonable  and  just  ? 

You  do  not  seem  to  have  given  any  weight  to  the  introduction  of  the 
qualifying  clause  into  section  4,  which  at  once  relieves  that  section  of  its 
harsh  and  unjust  features.  That  clause  is  in  the  section,  and  whether  it 
came  there  by  a  mistake  and  contrary  to  the  wishes  of  the  radicals,  it  is 
not  necessary  for  us  to  consider.  All  we  need  to  know  is  simply  the  fact 
that  it  is  there,  and  that  it  modifies  the  law  and  makes  it  reasonable, 
when  without  it  it  would  be  unjust,  pernicious,  and  lead  to  the  most  seri- 
ous consequences  to  the  commerce  of  the  country,  as  well  as  to  the  rail- 
roads. It  is  the  saving  clause,  and  I  do  not  think  the  railroad  companies 
have  any  right  to  disregard  it  and  construe  the  law  without  giving  due 
weight  to  that  clause. 

I  am  sorry  that  you  published  your  paper  in  the  shape  of  an  argu- 
ment in  opposition  to  my  interpretation.  Would  it  not  have  served  the 
same  purpose  if  you  had  made  your  argument  independently  of  mine, 
and  giving  your  own  interpretation  on  its  merits?  I  feel  sure  that  you 
did  not  correctly  understand  me,  and  as  I  do  not  desire  to  enter  into  any 
controversy  on  the  subject,  I  am  placed  rather  at  a  disadvantage. 

I  also  enclose  you  an  extract  from  Mr.  Davis's  opinion,  citing  a  few 

II 


154  INTER -STATE    COMMERCE    LAW. 

American  cases  which  sustain  the  interpretation  given  to  the  clause 
' '  under  substantially  similar  circumstances  and  conditions  "  as  including 
competition.  Yours  very  truly, 

(Signed.)  •  ALBERT  FINK. 

"Will  you  not  send  a  copy  of  this  letter  to  the  parties  to  whom  you 
have  sent  your  paper? 

[Enclosure .] 

EXTRACT   FROM   OPINION    OF   GEO.    DAVIS,    ESQ.,    COUNSEL    FOR    THE   AT- 
LANTIC  COAST   LINE,    REGARDLNG  INTERSTATE   COMMERCE   LAW. 

The  contention  that  shipments  made  from  competitive  points  are  not 
1 '  under  substantially  similar  circumstances  and  conditions "  with  those 
made  at  non-competitive  points,  is  not  without  authority  to  support  it. 
It  has  the  sanction  of  a  highly-respectable  text  writer:  "It  may  be  said 
that  the  rule  is,  both  at  common  law  and  under  most  of  the  regulatory 
statutes,  that  under  like  circumstances  and  the  same  class  of  goods,  the 
same  rates  should  be  charged  to  all."  Wood's  Railway  Law,  Vol.  I,  p. 
565.  And  in  illustrating  this  general  rule  the  author  says,  page  571: 
"Thus,  if  A  and  B  are  each  the  proprietors  of  a  coal  mine,  and  both 
send  their  coals  to  the  same  market,  A's  mine  being  within  twenty  miles 
of  the  market,  and  B's  forty  miles;  in  order  to  place  A  and  B  on  an 
equality  in  the  market,  the  company  would  not,  for  this  reason  alone,  be 
justified  in  charging  A  the  same  rates  for  hauling  his  coals  to  the  market 
that  are  charged  to  B,  as  this  would  be  a  palpable  inequality  of  rates  to 
deprive  A  of  his  natural  advantages.  But  inhere  there  is  a  competing  line 
from  B  and  not  from  A,  and  the  competing  line  carries  the  freight  from 
B  at  the  same  rates  that  it  is  carried  from  A,  the  company  would  be  jus- 
tified in  making  such  discrimination." 

In  Rogan  vs.  Aiken,  9  La.  609,  the  Supreme  Court  of  Tennessee, 
after  recognizing  the  common  law  rule  that  the  carrier  is  bound  to  carry 
at  equal  rates  for  all  customers  in  like  conditions,  decided  that  "a  com- 
mon carrier  may  discriminate  in  favor  of  persons  living  at  a  distance 
from  the  end  of  the  route,  where  the  object  is  to  secure  freight  which 
would  otherwise  reach  its  destination  by  a  different  route;  and  other  cus- 
tomers not  in  like  condition  will  have  no  right  of  action  because  of  dis- 
crimination, if  the  charges  made  against  them  are  reasonable." 

In  ex  parte  Koehler,  Receiver,  in  the  Circuit  Court  of  the  United 
States,  21  Am.  &  Eng.  R.  R.  Cus.,  52,  58,  the  Legislature  of  Oregon 
passed  an  Act  entitled  "An  Act  to  regulate  the  transportation  of  passen- 
gers and  freight  by  railroad  corporations,"  which  provided,  among  other 
things,  that  "no  greater  or  less  compensation  shall  be  charged  one  per- 
son "than  another  for  like  contemporaneous  service,"  and  "no  greater 
rate  shall  be  charged  for  carrying  similar  property  a  short  haul  than 
a  long  one,  in  the  same  direction." 

Deady,  J.:  "  I  assume  that  the  State  has  the  power  to  prevent  a 
railroad  company  from  discriminating  between  persons  and  places  for 
the  sake  of  putting  one  up  or  another  down,  or  any  other  reason  than 
the  real  exigencies  of  business.  *  *  *  *  *  But  where  the 
discrimination  is  between  places  only,  and  is  the  result  of  competition 
with  other  lines  or  means  of  transportation,  the  case,  I  think,  is  different. 


INTER -STATE    COMMERCE    LAW.  155 

For  instance,  the  act  prescribes  a  reasonable  rate  for  carrying  freight  be- 
tween Corvallis  and  Portland,  or  from  either  to  points  intermediate 
thereto.  But  Corvallis  is  on  the  river  and  has  the  advantage  of  water 
transportation  for  some  months  in  the  year.  The  carriage  of  goods  by 
water  usually  costs  less  than  by  land,  and  as  water  craft  are  allowed  to 
carry  at  a  rate  less  than  the  maximum  fixed  for  the  railway,  they  wiU 
get  all  the  freight  from  this  point  unless  the  latter  is  allowed  to  compete 
for  it.  *  *  #  '  *  *  If  the  Legislature  can  not  require  a  rail- 
way corporation,  formed  under  the  laws  of  the  State,  to  carry  freight  for 
nothing,  or  at  any  less  rate  than  a  reasonable  one,  then  it  necessarily  fol- 
lows that  this  provision  of  the  Act  can  not  be  enforced  so  far  as  to  prevent 
the  railway  from  competing  with  the  water  craft  at  Corvallis  and  other 
similarly  situated  points,  even  if  in  so  doing  they  are  compelled  to  charge 
less  for  a  lone:  haul  than  for  a  short  one  in  the  same  direction." 


THE    REAGAN    AND    CULLOM    BILLS    COMPARED. 


By    George    R.    Blanchard,     Commissioner    of    the    Central 
Traffic  Association. 

[Written  for  the  Railway  Age,  June,  1886.] 

Watt's  puff  of  steam  has  materialized  into  the  vastest  energy  of  the 
world.  To  regulate  only  its  railway  branch  wisely  in  its  commercial 
relations  to  a  great  nation  is  worthy  any  man's  thought. 

The  complexities  and  difficulties  of  govermental  administration  of 
railway  rates  are  greater  in  the  United  States  than  in  any  other  country. 
This  is  caused  by  its  greater  area,  larger  railway  mileage,  longer  coast 
lines,  more  numerous  navigable  lakes  and  rivers,  diversities  of  soil,  cli- 
mate and  products,  differences  between  rates  on  high  mountain  gradient 
and  level  lines,  the  rapidity  of  traffic  development,  our  desire  to  grasp 
foreign  markets,  the  crudities  and  dissimilarities  of  railway  charters  and 
legislation,  the  proximities  of  foreign  governments  and  carriers  and  the 
anomalies  and  contrarieties  of  state  and  national  authority  within  and 
across  non-physical  lines.  It  has  taken  half  a  century  in  insular  and 
parliamentary  England  to  reach  its  present  legal  stage  there  and  it  is  still 
incomplete  and  unsatisfactory.     How  much  more  difficult  here  ! 

The  phenomenal  increase  of  our  people  and  the  rapid  opening  of 
remote,  new,  and  often  sterile  localities  have  combined  to  induce  if  not 
justify  some  excessive  charges.  Bonuses,  discounts  and  speculations  in 
bonds  and  shares  gave  fictitious  values  to  many  railways.  Railway  and 
legislative  collusion  not  infrequently  procured  the  sanction  of  law  to 
excessive  capitalization.  As  rapidly  as  new  lines  competed  with  and 
reduced  the  rates  of  older  ones,  unreasonable  disparities  between 
through  and  local  rates  often  resulted.  Competition  became  strife,  strife 
became  rancor,  rancor  begat  reprisals,  drawbacks,  preferences,  discrim- 
inations and  excesses  on  local  rates  to  equalize  losses  on  through  traffic. 
It  is  time  this  was  controlled. 

The  time  is  here,  too,  when  an  honest  railway  and  an  honest  for- 
warder, engaged  in  completing  an  honest  commercial  transaction  at 
honest,  open  and  non-preferential  values  for  product  and  carriage, 
should  have  support  and  protection  from  law  against  the  dishonest  rail- 
way which  combines  with  the  cut-rate  forwarder.  Railway  managers 
of  old  and  responsible  lines,  who  intend  to  deal  fairly  and  impartially 
with  the  public  are  often  compelled  to  bury  that  desire  under  the  prefer- 
ential and  narrower  policies  or  needs  forced  upon  them  by  adjacent  or 
longer  or  more  poorly  equipped  railways.  The  latter  cut  rates  to 
deplete  the  former,  and  law  now  encourages  rather  than  stops  them. 
Farther  than  that,  the  thoughtful  sentiment  of  intelligent  railway  man-. 


INTER -STATE    COMMERCE    LAW.  157 

agers  favors  non-preferential  rates  from  conviction,  and  that  they  be 
equitably  proportioned  upon  through  and  local  traffic  and  justly  adjusted 
as  between  long  and  short  hauls.  When  such  broad  and  just  views 
compete  with  narrower  railway  knowledge,  or  purposes  or  manipulations 
of  less  breadth  and  honesty,  the  honest  manager  goes  down  and  usually 
amid  plaudits  from  many  law-makers,  who  regard  it  as  the  result  of 
competition.  The  honest  railway  class  should  seek  and  have  law  against 
the  latter  as  clearly  as  an  honest  merchant  requires  it  against  the  pro- 
curer of  any  other  goods  under  false  pretenses.  A  wise  and  well  admin- 
istered transportation  act  should  therefore  prove  of  as  much  value  to 
well-intending  railways,  as  to  the  great  bulk  of  patrons  who  ask  no 
advantages.  That  the  people  demand  it  is  apparent.  It  should  be 
mutual,  carefully  formulated  to  avoid  needless  disturbances  of  trade 
and  finance,  be  practical,  easily  applied,  and  neither  too  restrictive  nor 
too  lax.  It  will  involve  more  capital  and  revenue  than  the  nation's  debt 
and  incomes,  or  any  industry;  more  labor  than  any  other  special  calling, 
and  more  complications  than  any  or  all  mercantile  traffics  combined; 
directly  or  indirectly  it  will  touch  annually  nearly  every  inhabitant  as  a 
patron  or  beneficiary,  and  next  to  government  bonds,  the  values  involved 
represent  our  credit,  prosperity  or  depression,  at  home  and  abroad,  with 
investors  and  peoples  at  large.  Led  therefore  by  different  causes  and 
interests  to  common  premises,  the  views  of  the  advocates  of  congres- 
sional regulation  again  diverge  as  authoritatively  shown  by  the  variance 
in  two  measures  pending  at  Washington.  They  mark  the  present  stage 
of  the  crystallization  that  began  with  the  granger  laws  and  a  comparison 
of  their  salient  features  is  the  purpose  of  this  paper. 

The  Cullom  bill  was  introduced  in  the  Senate  February  16,  passed 
its  third  reading  May  11  by  a  vote  of  47  to  4  and  went  to  the  House. 

The  Reagan  bill  was  introduced  in  the  House  January  6,  and  passed 
the  8th  of  that  month  by  a  vote  of  158  to  75.  The  majority  each  bill  se- 
cured in  its  own  branch  of  the  co-ordinate  congress  indicates  radical 
differences  between  which  all  railwa}"  legislation  in  the  current  session 
may  fail,  but  it  will  come  in  its  season. 

The  Senate  bill  apparently  results  from  a  determination  to  treat  the 
question  justly,  keeping  wrongs,  rights  and  difficulties  in  view,  after 
traversing  the  principal  transportation  districts  to  ascertain  them.  The 
House  bill  is  stamped  with  the  idea  of  its  author  that  railways  are  mon- 
opolies, practicing  aggrandizement  and  discrimination  in  preference  to 
fair  dealing;  and  that  the  public  rights  in  them  at  least  equal  those  of 
their  owners.  Hence  its  narrower  plan  to  regulate  sternly  from  the 
standpoint  of  antagonism  rather  than  mutuality. 

The  Reagan  bill  is  entitled:  "A  bill  to  regulate  interstate  commerce 
and  to  prevent  unjust  discriminations  by  carriers." 

The  Senate  bill  is  entitled:  "A  bill  to  regulate  commerce." 

Neither  is  properly  entitled.  They  do  not  attempt  to  regulate  com- 
merce but  only  the  transportation  element  or  percentage  in  commodity 
values.  That  is  not  commerce  but  the  carriage  of  commerce.  It  is  like 
taxing  one  stave  in  a  barrel. 

With  this  note  in  passing,  the  following  citations  demonstrate  the 
relative  equities  of  the  bills: 


158  INTER -STATE    COMMERCE    LAW. 

FIRST — TO  WHAT   TRAFFICS  DO   THEY  APPLY. 

(a)  The  House  bill  is  silent  as  to  passenger  transportation,  an 
omission  which  has  been  frequently  suggested  to  its  author.  The  Senate 
bill  protects  both  with  like  safeguards,  provisions  and  penalties. 

(b)  The  Reagan  bill  says: 

' '  That  it  shall  be  unlawful  for  any  person  or  persons  engaged  alone 
or  associated  with  others  in  the  transportation  of  property  by  raU- 
road"  etc. 

The  Cullom  bill  says: 

"  The  provisions  of  this  act  shall  apply  to  any  common  carrier  or 
carriers  engaged  in  the  transportation  of  passengers  or  property  wholly 
by  railroad,  or  partly  by  railroad  and  partly  by  water  when  both  are 
used." 

The  Reagan  bill  therefore  exempts  connecting  boats  on  lakes,  rivers 
and  oceans.  If  they  be  parallel  to  the  railways,  it  permits  those  free 
and  unregulated  water  carriers  to  control  the  rates  of  one  or  many  other 
restricted  rail  carriers.  A  rail  and  lake  transaction  from  Chicago  to 
New  York  is  exempted  on  the  lake  by  the  Reagan  bill.  It  is  controlled 
under  the  Cullom  law  the  same  as  are  parallel  all  rail  carriers.  The 
Reagan  bill  therefore  encourages  unregulated  water  routes  to  contest  rail 
charges,  but  if  they  fail  so  to  do  the  bill  provides  how  to  regulate  the 
remainder. 

(c)  Another  difficult  phase  of  this  problem  is  the  close  proximity  of 
competing  railways  in  Canada.  The  necessity  for  the  equality  of  Ameri- 
can lines  is  apparant.     The  senate  bill  applies  to  property  transported 

"  from  any  place  in  the  United  States  to  an  adjacent  foreign  country, 
or  from  any  place  in  the  United  States  through  a  foreign  country  to  any 
other  place  in  the  United  States." 

The  Reagan  bill  contains  no  such  provision,  although  it  is  essential 
as  well  as  just  that  shipments  between  Chicago  and  Boston  and  New 
York  through  Canada  shall  be  upon  no  preferential  footing  as  against 
the  rails  wholly  on  our  own  soil. 

The  fifth  section  of  the  senate  bill  also  proposes  to  enjoin  foreign 
carriers  from  doing  business  in  the  States  if,  and  while  they  violate  the 
terms  and  conditions  applied  to  our  own  railways. 

SECOND — EQUALITY   OF   CHARGE  AND    SERVICE. 

The  requirements  of  both  measures,  that  all  charges  for  like  services 
shall  be  just  and  reasonable,  are  proper,  but  in  carrying  them  into  effect 
the  recognition  by  the  senate  bill  of  the  practical  in  trade  as  contrasted 
with  the  impracticable  in  theory  in  the  house  bill  is  striking. 

(a)    The  house  bill  says  all  railroads 

"shall  furnish,  without  discrimination,  the  same  facilities  for  the  car- 
riage, receiving,  delivery,  storage  and  handling,  *  *  *  and  shall 
perform  with  equal  expedition,"  etc. 

This  means  that  if  freight  taken  to  New  York  for  export,  misses  a 
steamer  and  is  stored  a  week  waiting  another — all  freight  must  be  stored 
a  week  if  demanded.  It  means  that  if  large  quantities  of  freight  are 
lightered  to  a  steamer  small  quantities  must  be  lightered  to  a  private 
warehouse.  It  means  that  if  a  railway  builds  a  siding  to  a  large  factory 
or  coal  depot,  it  must  build  one  at  the  same  point  for  a  small  individual 


INTER -STATE    COMMERCE    LAW.  159 

shipper.  It  means  prohibition  of  all  special  facilities  for  large  and  regu- 
lar traffics  that  are  not  given  to  spasmodic  and  small  tonnages.  It 
means,  for  example,  that  no  special  speed  shall  be  given  traffic  in  refrig- 
erator cars  for  a  charge  of  sixty-five  cents  per  one  hundred  pounds  over 
the  same  freight  carried  in  ordinary  cars  at  thirty  cents.  Both  the  extra 
rate  and  speed  are  declared  illegal. 

The  senate  bill  declares  it  unlawful: 

"  To  make  or  give  any  undue  or  unreasonable  preference  or  advan- 
tage in  any  respect  whatsoever,  or  to  subject  any  description  of  traffic  to 
any  undue  or  any  unreasonable  prejudice  or  disadvantage  in  any  respect 
whatsoever." 

This  is  plain,  practical,  business  justice  and  sense.  The  former  is 
technical,  obstructive  and  impracticable. 

THIRD — AS  TO  REBATES  AND  DRAWBACKS. 

The  Reagan  bill,  section  2,  says  it  shall  be  unlawful  "  directly  or 
indirectly  to  allow  any  rebate,  drawback  or  other  advantage  in  any 
form  upon  shipments  made  or  services  rendered." 

This  is  prohibition,  however  just,  uniform  or  universal  such  allow- 
ances may  be,  or  how  good  the  business  reasons  for  them. 

The  Culloni  bill,  recognizing  that  there  are  just  drawbacks  like  a 
merchant's  "  ten  per  cent,  off  "  for  cash  or  quantity,  says  (condensed) 
that 

"  If  any  common  carrier  shall  directly  or  indirectly,  by  special  rate, 
rebate,  drawback  or  other  device  charge  greater  or  less  compensation  for 
any  service  rendered  than  to  any  other  person  for  a  like  and  contempo- 
raneous service,  in  the  transportation  of  like  kinds  of  traffic  under  simi- 
lar conditions,  it  shall  be  liable  to  all  persons  charged  the  higher  rate  for 
the  difference  between  such  higher  rate  and  the  lowest  rate  charged  upon 
like  shipments  during  the  same  period,  and  shall  be  liable  to  pay  a  like 
rebate  or  drawback  to  all  shippers  between  the  same  points,  while  such 
contract  or  understanding  operated." 

That  there  are  proper  railway  drawbacks,  if  properly  allowed, 
should  go  without  saying.  What  objections  exist  to  a  drawback  on  all 
coal  shipped  to  Buffalo  clocks  in  winter,  refundable  when  the  coal  is  sent 
thence  by  lake  to  remote  points  in  the  spring  alike  to  all  under  the  same 
circumstances?  Why  should  the  same  drawback  be  allowed  to  local 
consignees  at  Buffalo  for  occasional  car-loads  delivered  in  winter, 
switched  repeatedly  and  held  on  sidings  that  consignees  may  unload  it 
leisurely  by  their  wagons  in  favorable  weather? 

If  a  manufacturing  establishment  receives  largely  of  crude  material 
and  ships  largely  of  manufactured  product,  what  objection  holds  to  a 
drawback  if  the  two  regular  rates  prove  prohibitory,  and  the  same  draw- 
back is  allowed  to  all  under  like  conditions?  Why  should  a  local 
receiver  and  forwarder  of  an  occasional  car-load  of  the  same  article  at 
the  same  point  be  entitled  to  the  same  aggregate  rates  as  that  large  man- 
ufacturer? 

A  drawback  is  now  allowed  at  Boston  on  tonnage  exported  via  that 
city  in  order  to  equalize  that  route  with  the  route  via  Baltimore,  and 
that  the  charge  from  Chicago  to  London  via  Boston  be  the  same  as  via 
Baltimore.  Moreover,  is  not  this  in  the  interest  of  all  the  people  and  all 
railways?     Should  not  Boston  be  permitted  to  do  this  when  the  same 


160  INTER -STATE    COMMERCE    LAW. 

thing  is  done  and  encouraged  at  Montreal,  provided  Boston  allows  the 
drawback  uniform^?  Farther,  if  it  is  so  allowed,  why  should  the  same 
drawbacks  apply  on  similar  shipments  to  Boston  city  for  local  consump- 
tion? The  senate  bill  seems  to  recognize  these  just  customs  and  require- 
ments, but  makes  them  uniform.  The  house  bill  prohibits  them  all  and 
in  this  instance,  as  in  others,  will  act  to  restrict  rather  than  extend 
American  trade,  and  give  the  nearest  and  cheapest  port  a  preference. 
The  senate  bill  is  business-like  and  practical  in  providing  that  any  excess 
paid  by  one  part}^  because  another  had  a  rebate  shall  be  refunded  in 
money^to  the  lowest  standard  of  rates.  The  house  bill  leaves  the  remedy 
in  the  courts  where  it  is  now  with  all  its  delays  and  vexations. 

FOURTH — PUBLICITY  AND  CHANGES  OF  RATES. 

The  Reagan  bill  provides: 

(a.)  "That  railways  shall  adopt  and  keep  posted  up  schedules  which 
plainly  state  the  different  kinds  and  classes  of  property  to  be  carried,  the 
different  places  between  which  such  property  shall  be  carried,  the  rates 
of  freight  and  prices  of  carriage  between  such  places,  and  for  all  services 
connected  with  the  receiving,  delivery,  etc. ,  and  that  the  accounts  for 
such  services  shall  show  what  part  of  the  charges  is  for  transportation." 

It  prescribes  the  sizes  of  type  and  other  details. 

The  Senate  bill  provides: 

"Such  rates,  fares,  charges  and  classifications  shall  be  made  public 
so  far  as  may  in  the  judgment  of  the  commission  be  deemed  practicable, 
and  said  commission  shall  from  time  to  time  prescribe  the  measure  of 
publicity." 

Note  again  that  the  House  bill  exempts  and  the  Senate  bill  includes 
passenger  fares. 

No  public  necessity  requires  useless  publicity.  No  railway  can  be 
compelled  by  national  law  to  publish  its  rates  if  the  shipping  and  des- 
tination points  are  in  one  State.  How  far  does  the  House  bill  require 
the  Boston  &  Albany  Railway  to  publish  rates  from  Boston  westwardly? 
Is  it  the  three  or  four  thousand  destination  points  in  the  West;  if  not, 
what  points  shall  and  which  others  shall  not  be  published?  What  right 
has  that  railway  to  publish  rates  from  Boston  to  Colorado  Springs  with- 
out that  authority  from  all  railroads  thereto,  and  suppose  the  road  from 
Denver  to  Colorado  Springs  or  any  other  in  one  State  refuses  to  give  its 
rates  to  railway  agents  at  Boston  or  Portland  or  Albany  or  Trenton,  how 
can  the  first  carrier  publish  them,  and  what  is  the  penalty  if  they  do  not 
when  they  can  not  f  Multiply  this  query  bj  the  number  of  railroads, 
stations,  conflicting  interests  and  refusals  of  many  western  roads  to  au- 
thorize intervention  in  their  rates,  and  the  inability  of  forwarding  com- 
panies to  specify  them,  and  what  can  result  but  confusion  and  imprac- 
ticability ?  Rates  can  not  be  published  to  every  point  that  may  be  called 
for. 

The  Senate  bill  first  guards  just  public  requirements  and  then  gives 
to  a  proper  power  the  right  to  specify  the  points  between  which  rates 
must  be  published,  but  with  proper  mutual  consideration  it  says: 

"Such  part  of  them  as  it  may  seem  practicable  for  such  common 
carriers  to  publish." 

The  House  bill  makes  no  stated  limit  to  its  requirement  in  this  re- 
spect. 


INTER -STATE    COMMERCE    LAW.  161 

(ft)  The  Reagan  bill  requires  that  the  part  of  each  freight  rate 
chargable  for  transportation  shall  be  separated  from  that  which  accrues 
for  station  service.  This  is  modelled  upon  English  law,  where  cartage  is 
usually  included  in  the  rate  at  starting  and  stopping  points,  but  is  im- 
practicable here.  If  rates  are  published  from  Saratoga,  N".  Y.,  to  To- 
peka,  Kan.,  how  can  the  agent  at  Saratoga  specifj^  what  part  of  the 
through  rate  on  each  class  shall  represent  station  charges  at  Topeka,  and 
how.  in  turn,  can  the  agent  at  Topeka  do  the  same  thing  for  Saratoga? 
Again,  if  the  same  rate  for  a  short  haul  or  a  long  haul,  plus  the  varying 
cost  of  station  service  at  small  as  compared  with  large  tonnage  points 
makes  the  gross  charges  more  for  the  short  haul,  is  it  not  prohibited  by 
the  act?  Therefore,  why  separate  the  charges  and  confuse  the  accounts 
to  no  purpose  ?  It  costs,  say,  fifteen  cents  per  ton  to  handle  freight  at 
Buffalo.  It  costs  over  two  dollars  per  ton  at  many  small  stations.  To 
publish  this  disparity  with  each  freight  bill  is  needless  and  confusing. 

The  Senate  bill  wisely  deals  "only  with  the  totals  of  the  carriers' 
charges  and  permits  railway  business  to  proceed  within  legal  limits  with 
as  little  embarrassment  as  is  required  to  secure  the  public  justly.  This  is 
adaptation  and  forethought. 

(c)  The  Senate  bill  provides  that  where  passengers  and  freight 

"  Pass  over  lines  or  routes  operated  by  more  than  one  common  car- 
rier, having  joint  tariffs  of  rates  or  fares,  it  shall  be  deemed  a  compli- 
ance with  the  law  if  copies  are  filed  by  any  one  of  the  said  common 
carriers,  and  that  no  carrier  shall  be  liable  for  the  failure  of  any  other 
carrier  to  observe  and  adhere  to  the  rates,  fares  and  charges  made  and 
published." 

This  is  just,  simple  and  ample.  It  locates  the  offense  and  penaltj" 
upon  the  violating  carrier.  The  house  act,  apparently  requiring  the 
publication  of  a  rate  from  Philadelphia  to  Butte  City,  Montana,  makes 
the  first  carrier  whose  bill  of  lading  is  issued  responsible  for  the  viola- 
tion of  the  rate  of  the  final  and  remote  carrier,  which  it  can  not  direct  or 
control.  This  is  another  instance  of  its  more  equitable  and  better  busi- 
ness methods. 

(d)  The  Reagan  bill  says  : 

"  Copies  of  rates,  printed  as  aforesaid,  shall  be  posted  as  provided 
at  least  five  days  before  the  same  shall  go  into  effect,  and  the  same  shall 
remain  in  force  until  another  schedule  shall  be  substituted." 

The  Cullom  bill  provides  : 

"No  advance  in  public  rates,  fares,  charges  and  classifications  shal . 
be  made  except  after  ten  days'  public  notice,  but  reductions  in  the  same 
may  be  made  without  previous  public  notice." 

The  Senate  bill  thereby  conforms  to  railway  practice  on  both 
increased  and  lessened  rates.  If  reduced  rates  were  published  five  days 
before  their  effect,  a  small  relative  business  would  move  in  those  five 
days,  but  tonnage  would  crowd  for  a  time  thereafter.  River,  lake  and 
ocean  carriers,  exempted  from  the  House  bill,  make  advances,  reductions 
and  variations  daily  without  notice.  Parallel  railways  which  can  not 
rednce  for  five  days  will  therefore  lose  business  competitive  with  them 
not  only  during  that  time  but  thereafter,  because  at  the  end  of  each  five 
days  water  routes  can  again  reduce  enough  to  absorb  the  traffic.  After 
railways  have  decided  to  reduce,  why  should  the  public  be  deprived  of 


162  INTER -STATE    COMMERCE    LAW. 

that  benefit  for  five  days  by  rail  alone?  The  Senate  bill  is  more  practi- 
cal and  just  and  protective  of  public  interest,  because  it  gives  the  people 
the  prompt  benefit  of  reduced  rates  and  delays  for  ten  days  the  imposi- 
tion of  higher  rates. 

FIFTH— INTERCHANGES  OF   TRAFFIC  AMONG   RAILWAYS. 

Both  bills  treat  of  interchanges  between  different  and  perhaps  com- 
peting railroads.  The  universal  business  principle  not  to  permit  a  rival 
to  use  the  facilities  of  an  owner  for  the  former's  benefit  is  recognized  in 
the  Senate  bill  in  the  following  language  : 

"No  common  carrier  shall  be  required  to  give  the  use  of  its  tracks 
or  terminal  facilities  to  another  carrier  engaged  in  like  business." 

The  House  act,  contrariwise,  provides  that  it  shall  be  unlawful 

"  To  prevent  the  carriage  of  such  property  from  being  continuous 
from  the  place  of  shipment  to  the  place  of  destination,  whether  carried 
on  one  or  several  roads." 

Nothing  limits  this  word  "  several."  Suppose  the  New  York  Cen- 
tral lines  from  Chicago  determined  to  flood  the  Pennsylvania  railroad 
from  Pittsburgh  east  with  unprofitable  freight,  against  the  direct  all  the 
way  lines  of  the  Pennsylvania  railroad,  what  rates  could  the  latter 
charge  from  Pittsburgh  in  such  event?  The  House  bill  says  this  disturb- 
ing and  irregular  transportation  shall  be  continuous  from  shipment  to 
destination.  To  be  continuous  it  must  have  continuous  through  rates 
and  continuous  through  cars.  Mischievous  power  is  put  in  the  hands  of 
the  first  carrier.  Has  not  the  second  carrier  the  undoubted  right  to 
refuse  such  rates,  traffic  and  cars?  The  Reagan  bill  authorizes,  empow- 
ers and  directs  that  every  railroad  shall  receive  freight  from  every  other 
railroad,  regardless  of  the  first  owner's  injured  local  or  through  interests, 
or  its  rates  and  objections  from  any  cause,  and  that  the  two  shall  make 
continuous  transportation  regardless  of  unities  or  disparities  of  interests. 

The  Senate  bill  wisely  recognizes  the  inherent  and  vested  rights 
of  railway  proprietors  like  those  owning  other  property,  and  says  that  no 
common  carrier  shall  be  compelled  to  give  his  facilities  to  his  rival.  The 
Reagan  bill  is  much  like  legislating  that  any  man  may  move  into  and 
through  another  man's  house,  regardless  of  the  latter's  protest,  charges, 
occupancy,  rights,  title  or  notices. 

SIXTH — AS   TO   THE   SYSTEMS   CALLED   POOLING. 

(a)    The  House  bill  says: 

' '  It  shall  be  unlawful  for  any  person  or  persons  carrying  property 
as  aforesaid  to  enter  into  any  contract,  agreement  or  combination  for  the 
pooling  of  freights  or  to  pool  the  freights  of  different  and  competing  rail- 
roads by  dividing  between  them  the  aggregate  or  net  proceeds  of  the 
earnings  of  such  railroads  or  any  of  them." 

The  Senate  bill  reserves  the  rights  of  the  people  and  prudently  says: 

"The  said  commission  shall  specially  inquire  into  that  method 
of  railway  management  or  combination  known  as  pooling,  and  shall  re- 
port to  congress  what,  if  any  legislation  is  advisable  and  expedient  upon 
that  subject." 

The  purpose  of  both  bills  is  the  maintenance  of  equal,  non-discrimi- 
nating, reasonable,  just  and  proper  comparative  rates.  If  pools  accom- 
plish those  results,  how  do  they  violate  sound  public  policy  and  why 


INTER -STATE    COMMERCE    LAW.  103 

should  they  be  prevented?  If  six  railroads  from  Chicago  have  six  differ- 
ent rates  tor  six  patrons  on  the  same  article  to  six  consignees  in  New- 
York,  the  one  which  carries  at  the  lowest  price  for  the  "most  favored 
patron  will  ruin  the  railways  charging  and  the  patrons  paying  higher 
prices.  A  proper  pool  stops  this  preference  by  public  and  effective 
administration  for  the  uniform  benefit  of  carriers  and  merchants. 
Should  not  wise  legislation  therefore  as  clearly  direct  that  six  railways 
have  the  same  rates  between  the  same  points  as  that  one  railway  should 
not  have  six  different  rates  for  the  same  patrons,  points  and  products? 
How  can  the  mercantile  or  public  result  differ  between  six  railways  hav- 
ing six  rates  from  the  same  place  and  one  railway  having  the  same  six 
rates?  The  same  commercial  disturbances,  preferences  and  discrimina- 
tions ensue  in  both  cases.  If  government  properly  requires  one  railway 
to  makes  its  rates  equal  and  non  preferential,  why  should  it  not  equally 
require  that  six  railways  make  them  so,  or  legalize  the  contract  which 
does  it?  Our  legislators  hesitate  at  this,  as  if  asked  to  legalize  a  con- 
spiracy, sanction  extortion  or  enforce  preferences,  but  it  is  the  short  road 
to  justice  and  equality.     The  English  clearing  house  act  so  provides. 

If  pools  maintain  rates  at  extortionate  standards,  other  clauses  of 
both  the  Senate  and  House  acts  properly  intervene.  If  they  do  not,  in 
what  manner  do  pools  differ  in  public  results  from  other  methods  of 
maintaining  equal  rates/  Concede  that  rates  are  universally  brought 
down  and  "equalized  by  the  national  authority  in  either  act,  what  can 
then  be  the  public  objection  that  they  be  administered  and  the  traffic 
divided  by  a  pool?  No  forwarder  pays  more  or  less,  and  forwarders 
have  the  great  advantage  that  all  railways  will  then  act  as  one  for  all 
iorwarders  impartially  Treated  as  if  one  firm. 

If  rates  from  all  competing  centers  are  to  be  maintained  alike  to  all 
points  of  common  destination  by  all  railways  therefrom  that  result  can 
be  reached  only  by  conference  and  agreement  between  rivals.  A  pool  is 
one  of  those  forms  of  agreement  intended  to  secure  to  railroads  acting 
faithfully  to  rivals  and  the  public  their  due  shares  of  traffic,  under  pen- 
alties to  be  paid  by  any  dishonest  and  evasive  carriers  which  practice 
sinuous  methods.  The  results  in  no  wise  change  the  rates  charged, 
wThether  reasonable  or  unreasonable,  and  public  sentiment,  speaking 
intelligently  through  large  transportation  bodies  like  boards  of  trade, 
now  largely  favors  pools.  The  Senate  bill  apparently  recognizes  such 
forms  of  traffic  unity,  as  intended  to  achieve  the  uniformity  of  rates 
essential  to  commercial  equality,  and  directs  its  commission  to  find  out 
if  that  is  the  practice  and  result. 

The  House  bill  refuses  to  even  consider  that  question. 

Seventh:     Long  and  short  hauls. 

(a)  This  feature  in  both  bills  has  provoked  the  widest  discussion 
and  diversity  of  opinion. 

The  house  bill  says: 

"  It  shall  be  unlawful  *  *  *  *  to  charge  or  receive  any  greater 
compensation  *  *  *  *  for  a  shorter  than  a  longer  distance  on  any 
one  railroad,  and  the  road  of  a  corporation  shall  include  all  the  roads  in 
use  by  such  corporation,  whether  owned  and  operated  by  it  under  a  con- 
tract, agreement  or  lease  by  said  corporation." 

The  writer  propounded  the  following  cjueries  to  Judge  Reagan, 
before  his  committee,  in  February  last: 


164  INTER -STATE    COMMERCE    LAW. 

' '  If  the  Pennsylvania  railroad  controls  and  operates  its  line  from 
New  York  to  Chicago,  does  its  minimum  pig  iron  rate  upon  the  level 
and  straight  track  of  the  Fort  Wayne  road  when  the  forwarder  loads  and 
consignee  unloads,  fix  the  maximum  rate  on  a  similar  shipment  for  the 
same  distance  from  Philadelphia  to  New  York,  involving  the  enormous 
terminal  costs  in  Philadelphia  and  Jersey  City,  the  still  greater  added 
outlays  for  crossing  the  Hudson  river  by  boat,  and  finally  the  great  addi- 
tional terminal  expense  on  New  York  piers?" 

He  finally  replied  that  he  so  intended. 

Can  more  unjust  transportation  legislation  be  conceived?  Barge 
transportation  alone  across  the  Hudson  at  New  York  costs  double  the 
entire  cost  on  the  Fort  Wayne  extension  in  Indiana,  but  that  fact  is  not 
to  avail.  The  two  transactions  have  no  commercial,  geographical,  finan- 
cial or  any  other  relations  to  each  other,  and  why  should  the  one  rate  in 
any  wise  act  upon  or  limit  the  other? 

Under  this  ruling  the  Union  Pacific  can  not  charge  more  on  moun- 
tain grades  of  220  feet  per  mile,  where  it  can  haul  but  six  cars,  than  for 
the  same  distances  on  the  plains  where  it  can  move  sixty  cars.  Why  the 
mountaineer  should  pay  no  more,  or  the  man  on  the  plains  be  denied  his 
advantages,  has  never  been  made  to  appear. 

(b)  I  asked  Judge  Reagan  '  •  if  the  rate  charged  by  a  railway  com- 
pany when  it  loaded  and  unloaded  freight  at  its  expense  could  be  more 
than  a  similar  transaction  for  the  same  distance  elsewhere,  where  the 
owner  loaded  and  unloaded  the  freight."  He  answered  that  it  was  in- 
tended to  make  the  two  transactions  alike.  The  element  of  cost  to  which 
railway  agitators  have  so  long  and  often  appealed,  is  thus  apparently 
discarded  by  their  national  interpreter. 

(c)  The  writer  also  asked  Judge  Reagan  if  tonnage  from  a  branch 
road  passing  thence  to  a  main  line  junction,  over  that  main  line  to 
another  junction,  and  then  over  a  second  branch  road  to  destination,  in- 
volving four  terminal  services  and  differences  in  gradients,  cost,  risk, 
handling  and  quantities,  should  be  at  the  same  rates  that  would  prevail 
for  a  like  distance,  upon  a  direct  and  level  main  line,  having  an  enor- 
mous traffic,  no  handling  and  but  two  terminal  services.  He  replied 
with  the  determination  to  make  the  charges  alike.  Thousands  of  cases 
can  be  cited  where  this  is  an  application  of  the  rejected  pro  rata 
principle. 

The  Reagan  bill  therefore  makes  the  minimum  railway  rate  charged 
for  any  distance  on  any  part  of  any  line  for  the  lowest  cost  and  under 
the  most  favorable  circumstances,  its  maximum  charge  for  another  sim- 
ilar transaction,  on  another  part  of  its  line,  under  the  most  unfavorable 
circumstances  and  involving  the  highest  cost.  Of  course  this  ruling  will 
make  every  railway  put  up  its  level-road  and  low-cost  rates. 

(d)  The  author  of  the  House  bill  was  further  questioned  upon  the 
following  facts : 

The  Boston  Hoosac  Tunnel  and  Western  railway  runs  from  North 
Adams,  Mass.,  to  Mechanicsville,  N.  Y.,  forty-six  miles,  including  a 
bridge  crossing  the  Hudson  river.  That  company's  proportion  of  a 
through  rate  from  Boston  to  New  Orleans  on  freight  carried  by  rail 
against  the  ocean,  and  which  freight  it  neither  loaded,  unloaded,  way- 
billed  nor  saw,  and  only  hauled  as  a  mere  transfer  company,  was  very 


INTER -STATE    COMMERCE    LAW.  165 

small.  Was  it  the  maximum  it  could  charge  another  forwarder  of  the 
same  article,  from  North  Adams  town  to  a  consignee  living  at  Mechanic- 
ville,  for  whom  it  furnished  warehouses,  switching  power,  and  receiving, 
handling  and  loading,  unloading  and  delivery  labor  at  both  ends?  He 
again  replied  that  by  his  act  this  smallest  charge  should  regulate  the 
latter. 

I  then  asked:  "  If  boxes  of  boots  and  shoes  were  bought  at  Boston 
to  be  sent  to  New  Orleans  by  rail  over  nine  railroads,  should  the  local 
rates  of  the  nine  roads,  on  nine  transactions,  involving  eighteen  rehand- 
lings,  be  exactly  the  sum  of  one  through  rate  and  transaction  and  two 
handlings  from  Boston,  which  through  rate  was  made  in  competition 
with  outside  steamships  unregulated?"  After  much  discussion  Judge 
Reagan  replied  that  the  act  so  intended. 

(e)  When  the  onerous  burdens  produced  by  the  rigid  application  of 
this  most  unjust  rule  through  the  Union  bring  down  local  transactions  to 
the  proportions  of  through  rates  which  railroads  share  to  develop 
through  commerce,  the  serious  public  consideration  is  that  the  railways 
will  cease  from  sharing  through  rates  that  thus  reduce  their  local 
charges  and  will  make  their  lines  or  parts  of  lines  local ,  on  through  as 
well  as  local  freights,  whether  in  one  or  two  States,  as  far  as  to  their  in- 
terest and  they  practically  and  legally  can.  No  law  can  compel  a  rail- 
way to  share  a  through  rate  it  has  not  assented  to,  nor  has  declined  or 
disagreed  from.  Therefore,  to  revert  to  the  case  of  the  Boston  boots 
and  shoes  to  New  Orleans,  the  Boston  &  Albany  and  the  other  carriers 
would  discontinue  the  carriage  from  Boston  to  New  Orleans  of  all  traffic 
which  limited  nine  local  charges.  If  they  withdraw  from  that  through 
traffic,  would  not  the  steamship  companies  then  advance  their  rates?  In 
what  practical  way,  then,  would  the  Reagan  bill  accomplish  the  regula- 
tion intended? 

Steamships  sailing  from  Baltimore  to  Boston,  for  further  example, 
would  sail  unregulated  by  the  House  act,  but  the  same  law  is  to  require 
railways  from  Baltimore  to  Boston  to  cut  down  all  their  local  and 
through  transactions  to  the  level  of  the  limitations  forced  upon  them  by 
that  untouched  water  carrier.  The  water  carrier  may  land  en  route  at 
Norfolk  and  at  Providence,  make  any  through  or  local  rates  it  pleases, 
higher  locally  than  through  if  it  likes;  different  for  the  same  shipments 
for  the  same  points  upon  the  same  ship  if  it  chooses,  and  the  Reagan  bill 
leaves  it  untouched,  but  parallel  railways  are  clutched  with  prohibitions 
and  made  to  disgorge  an  excess  thus  legally  defined,  or  retire  from  the 
traffic.  Will  they  not  then  advance  their  rates  on  traffic  remaining  to 
them?  The  same  statement  is  broadly  true  of  the  unregulated  competi- 
tion of  the  Atlantic  and  Pacific  coast  lines  and  canals,  rivers  and  lakes 
in  the  interior,  which  restrict  parallel  rail  carriers,  and  at  a  time  when 
the  government  is  spending  hundreds  of  millions  to  make  water  compe- 
tition with  rail  more  effective. 

(/)  Traffic  from  China  to  England  carried  across  the  United  States 
leaves  either  Chinese  or  English  money  or  both  in  the  hands  of  our  rail- 
ways, laborers  and  investors.  Such  transactions  have  no  bearing  upon 
the  interests,  commerce  or  equalities  of  our  own  people,  but  the  Reagan 
bill  says  that  every  railway  link  in  that  transcontinental  line  shall  be  de- 
barred from  charging  more  for  local  carriage  over  the  part  of  its  line 
used  than  the  through  transaction  yielded  over  the  same  rails. 


166  INTER -STATE    COMMERCE    LAW. 

The  vast  sea  frontage  and  interior  water  mileage  of  this  country  ren- 
der such  illustrations  as  this  numberless  and  they  cover  a  manifold  and 
enormous  traffic  competitive  with  rail. 

(g)  Another  and  even  more  important  phase  of  the  long  and  short 
haul  question  is  that  the  House  bill  will  shut  the  farms  of  Nebraska  out 
of  the  eastern  markets,  if  the  Nebraska  grain  rate  allowed  each  carrier 
as  its  part  of  a  through  rate  is  to  regulate  the  same  carrier's  local  grain 
rates.  If  grain  raised  in  the  Genessee  valley  pays  one-fourth  as  much  to 
New  York  as  does  grain  from  Omaha— yet  more  per  mile,  what  reason 
exists  why  the  one  should  be  advanced  or  the  other  reduced,  and  which 
result  would  follow? 

In  the  case  of  the  Pennsylvania  road,  where  85  per  cent,  of  its  traffic 
is  local  and  15  per  cent,  through,  it  would,  of  course,  raise  its  through 
rates.  Each  railway  would  similarly  decide  which  was  best  for  it,  and 
if  interests  and  conclusions  conflicted^  the  rates,  trade  and  values  would 
be  disturbed,  disorganized  and  injured.  The  interests  nearest  the  sea- 
board would  be  particularly  benefited  by  rates  relatively  much  lower 
than  now. 

The  same  argument  holds  good  with  foreign  trade.  We  can  not 
send  corn  from  Kansas  to  England  if  every  local  American  railway  rate 
is  gauged  by  our  attempts  to  put  our  remote  farm  products  into  England 
at  lower  than  the  local  rates  combined. 

The  necessity  for  a  wise  and  statesmanlike  basis  of  exemption  as 
much  in  the  interest  of  the  people  in  preventing  extortionate  parallel 
steamboat  charges,  as  in  preventing  prohibitory  through  railroad  charges, 
is  apparent  from  these  illustrations. 

(h)  That  the  Senate  partially  endeavored  to  provide  wisely  for 
these  constant  contingencies,  after  discussing  them  all  over  the  country, 
and  that  the  House  has  restricted  them  unwisely  without  knowledge,  ap 
pears  first  from  the  foregoing  definitions  by  Judge  Reagan,  and  next 
from  a  comparison  of  his  rulings  with  the  following  Senate  provisions: 

' '  The  commission  may  from  time  to  time  make  general  rules 
exempting  such  designated  common  carrier  in  such  special  cases  from 
the  operation  of  this  Act"  (long  and  short  haul  provision). 

The  Senate's  final  definition  of  long  and  short  hauls  is  then  stated  in 
full  as  follows: 

"  It  shall  be  unlawful  for  any  common  carrier  subject  to  the  pro- 
visions of  this  act  to  charge  or  receive  any  greater  compensation  than  the 
aggregate  for  the  transportation  of  passengers  or  of  the  like  amount  of 
property,  under  substantially  similar  circumstances  and  conditions  for  a 
shorter  than  for  a  longer  distance  over  the  same  line  in  the  same  direc- 
tion, and  from  the  same  point  of  departure  or  to  the  same  point  of 
arrival ;  but  this  shall  not  be  construed  as  authorizing  any  common  car- 
rier within  the  terms  of  this  act  to  charge  and  receive  as  great  compensa- 
tion for  a  shorter,  provided,  etc.,  as  for  a  longer  distance." 

The  Reagan  bill,  as  I  have  shown,  does  not  limit  the  equality  of 
long  and  short  rates  to  traffic  between  the  same  points,  in  the  same  direc- 
tion or  upon  the  same  part  of  the  road.  It  computes  branches  with 
small  traffics  as  no  more  expensive  in  operation  than  main  lines  with 
large  traffics  ;  it  places  the  excessive  cost  of  high  gradients  on  a  parity 
with  the  economies  of  level  lines  in  States  widely  apart;  it  puts  a  level 


INTER- STATE    COMMERCE    LAW.  167 

double  track  road  beside  a  river  upon  the  same  basis  as  a  single  track 
road  climbing  a  mountain  ;  it  disregards  all  conditions  of  economy  or 
costliness  on  different  parts  of  a  great  system  of  road;  it  disregards  load- 
ing and  unloading,  insurance,  number  of  cars  in  a  train  and  all  of  the 
other  conditions  which  make  rates  justly  variable. 

The  Senate  language  above  quoted  is  a  partial  recognition  of  the 
thousands  of  varying  conditions,  but  has,  I  think,  been  misunderstood 
by  the  public.  It  provides  more  thoughtfully  that  the  rate  shall  not  be 
the  same  "for  a  shorter  than  for  a  longer  distance,"  but  defines  its  mean- 
ing, as  follows: 

(a)  Over  the  same  line. 

(b)  In  the  same  direction. 

(c)  From  the  same  point  of  departure,  or 

(d)  To  the  same  point  of  arrival. 

There  are  elements  of  just  railway  protection  in  these  provisions. 
For  example,  it  provides  that  the  rate  from  Philadelphia  to  Pittsburgh 
shall  not  be  exceeded  by  a  rate  from  Philadelphia  to  any  point  east  of 
Pittsburgh,  nor  by  any  rate  from  a  point  east  of  Philadelphia  into 
Pittsburgh,  because  in  the  one  instance  it  is  the  same  point  of 
departure,  and  in  the  other  of  arrival.  The  grades,  conditions 
and  line  over  which  these  transactions  transpire  are  substan- 
tially the  same,  the  receipt  at  Philadelphia  and  delivery  at 
Pittsburgh  are  mainly  the  same,  and  the  receipt,  handling  and 
delivery  at  local  intermediate  stations  are  not  likely  to  vary  as  greatly  as 
on  the  remote  parts  of  a  system.  Note  the  fairer  consideration  of  fact, 
cost,  practice  and  equity  in  this  application  than  appears  from  Judge 
Reagan's  rulings  on  his  own  bill. 

Then  follows  the  amended  Senate  limitation: 

"That  this  shall  not  be  construed  as  authorizing  *  *  *  as 
great  compensation  for  a  short  as  for  a  longer  distance." 

This  has  provoked  much  discussion  and  clearly  does  not  mean  that 
rates  may  not  be  the  same  if  reasonable  and  just,  but  only  that  the  law- 
withholds  its  sanction  in  cases  where  the  same  rate  may  be  unjust.  If 
not  so  qualified  might  not  a  long  line  like  the  Union  Pacific  claim  the 
right  to  charge  as  much  for  fifty  miles  of  interstate  carriage  as  for  one 
thousand?  The  law  does  not  jwevent  \ke  same  charge  nor  does  it  now 
authorize  it.  It  may  be  right  and  legal,  but  the  law  does  not  intend  tha  t 
every  such  charge  shall  be  legalized  by  the  act  in  advance  of  the  fact. 
It  is  simply  a  negative  withholding  of  governmental  approval  from  an 
equal  charge  which  may  be  found  unjust.  It  is  not  a  prohibition  of  an 
equal  charge  for  a  short  and  long  haul  if  the  national  commission  finds 
both  reasonable.  It  merely  reserves  its  rights  and  decisions.  The  con- 
text of  this  proviso,  the  reserved  confirmation  or  dissent,  and  the  power 
given  to  the  commission  to  authorize  less  rates  for  shorter  than  for 
longer  distances,  all  confirm  this  just  view. 

The  Seaate  bill  in  this  regard  protects  forwarders  to  the  fullest  ex- 
tent consistent  with  the  rights  due  the  railways.  The  commission  ap- 
pointed under  the  act  will  find  many  justifications  for  licensing  long 
hauls  at  rates  less  than  short  ones,  and  the  transcontinental  California 
and  New  Orleans  cases  above  cited  are  in  proof.  Can  there  be  any 
doubt  that  railways  should  be  thus  licensed  to-day  from  St.  Paul  to 


168  INTER- STATE    COMMERCE    LAW. 

New  Orleans  against  the  river  that  flows  there?  The  French  authorities 
license  their  railways  to  cany  the  products  of  the  Mediterranean  across 
France  on  their  way  to  England  at  a  less  rate  in  France  than  the  same 
product  would  pay  if  landed  and  consumed  in  France.  This  is  a  par- 
allel to  our  foregoing  transcontinental  illustration.  Germany  and  Bel- 
gium have  authorized  governmental  tariffs  which  make  exceptional  pro- 
vision for  international  transportation,  against  combined  ocean  and  river 
routes.  Similar  exceptions  are  repeatedly  granted  by  the  English  board 
of  trade,  as  from  Glasgow  to  Edinburgh  and  between  London  and  Liver- 
pool by  rail  routes  competitive  with  water  carriage.  The  three  great 
rail  lines  from  Liverpool  to  London  charge  less  upon  American  provis- 
ions sent  from  New  York  to  London  via  Liverpool,  than  the  local  rates 
from  Liverpool  to  London  on  the  same  products,  in  just  recognition  of 
their  rivalry  with  ocean  carriage  all  the  way  from  New  York  to  London. 

Such  inequalities  exist  yet  more  numerously  in  this  country  by  lake, 
ocean  and  canal.  The  lake  rate  on  corn  from  Chicago  to  Buffalo  is  less 
than  from  Chicago  to  Cleveland,  a  lesser  distance,  because  quantity, 
regularity  of  trip,  facilities  for  loading  and  unloading  at  elevators,  etc., 
differ.  Erie  Canal  rates  on  corn  from  Buffalo  to  New  York  for  enor- 
mous regular  quantities  are  less  than  for  occasional  boat  loads  from 
Buffalo  to  Yonkers  or  West  Point,  where  no  elevator  facilities  exist. 
These  constant  commercial  considerations  can  not  be  legislatively 
ignored.  It  seems  the  thoughtful  purpose  of  the  Senate  to  intrust  the 
due  and  farther  consideration  of  them  to  a  railway  commission.  The 
House  so  far  fails  £o  adequately  recognize  the  accepted  rules  of  commer- 
cial conduct  in  the  railway  administrations  which  must  deal  with  all 
commerce.  I  have  not  touched  upon  the  legal  pains  and  penalties  of  the 
different  bills  in  which  the  more  fair  and  mature  consideration  of  the 
Senate  law  is  equally  shown. 

The  brief  limits  of  this  article  preclude  adequate  representation  of 
this  vastly  important  question.  I  should  have  been  glad  to  show  how 
water  routes  regulate  and  limit  rail  rates;  how  our  rail  rates  compare 
with  those  of  Europe;  what  has  been  done  by  voluntary  but  permanent 
reductions  of  freight  rates  in  recent  years;  how  lands  distant  from  mar- 
kets have  been  plowed  and  tilled  as  much  by  the  locomotive  as  by  the 
immigrant;  how  our  foreign  commerce  has  been  developed  by  through 
rates;  the  effect  of  the  legal  immunities  of  roads  which  like  the  New 
York  Central,  or  like  the  Pennsylvania  main  line  from  Pittsburgh  and 
Erie  to  Philadelphia,  on  lake  and  river  traffics  are  all  in  state  limits  Avhile 
their  rivals  are  interstate;  what  the  effects  of  this  indirect  independence 
are,  and  how  railways  and  publics  thrive  mutually  only  by  mutual  rela- 
tions. All  these  questions  enter  deeply  into  the  problem,  but  I  have 
contented  myself  with  a  simple  comparison  of  portions  of  the  bills  which 
touch  the  practical  business  questions.  Legislation  upon  them  must  be 
new  and  crude  and  should  therefore  be  flexible.  England  enacted  and 
repealed  over  a  thousand  bills  before  it  reached  its  present  board  of 
trade  act.  We  can  not  even  adopt  that  law  because  the  conditions  differ 
so  much.  It  is  presumption  to  believe  that  with  the  multitudes  of 
greater  carrying  complications  in  this  country,  an  act  such  as  the  House 
bill  can  solve  problems  which  have  defeated  the  wisest  thought  of  for- 
eign governments  for  fifty  years.     Every  railway  company  should  aid  its 


INTER- STATE    COMMERCE    LAW.  169 

solution  frankly,  thoughtfully,  promptly,  concede  just  public  demands, 
and  recognize  public  rights  and  interests  in  the  question  and  the  rights  of 
both  stronger  and  weaker  rivals.  All  this  should  pass  without  gain- 
saying. 

The  House  bill  makes  no  provision  for  a  commission  to  consider,  sift 
and  -report  upon  the  gigantic  difficulties.  The  senate  attempts  and 
intends  to  provide  thoughtful  foreknowledge.  The  House  bill  at  once 
seizes  and  pimishes  an  offender  against  its  impracticable  conditions  and 
conclusions.  The  Senate  bill  warns  and  admonishes  before  arresting  and 
punishing.  Both  acts  must  be  administered  over  a  vast  railway  mileage 
and  national  area,  by  thousands  of  general  and  local  railway  officials  who 
have  various  standards  of  intelligence,  purpose  and  integrity.  A  large 
majority  of  them  mean  right;  the  minority  fail  to  do  so,  either  through 
intent  or  lack  of  information.  The  vice-like  and  impracticable  regula- 
tions of  the  House  bill  will  fail  their  purpose,  confuse  commerce,  throw 
rail  rates  into  disorder,  advance  water  route  rates,  cause  the  withdrawal 
of  many  through  rail  rates,  and  be  of  almost  impossible  daily  application 
in  the  manifold  transactions  involved. 

The  Senate  bill  appears  to  have  recognized  the  vast  issues  raised, 
the  immense  tonnage  carried,  the  millions  of  diverse  transactions  to  fall 
annually  under  its  scope,  the  necessity  for  conference,  concession  and 
equity,  and  the  public  ignorance  or  misconception  of  the  mutualities 
required.  It  provides  a  special  tribunal  through  which  the  railways 
may  make  continuous  representation  to  both  branches  of  congress.  Such 
a  commission  will  educate  the  public  as  to  their  riglfts,  and  act  as  the 
medium  for  a  better  understanding.  It  gives  that  medium  a  warning,, 
admonishing  and  then  correcting  and  enforcing  power.  It  looks  to  far- 
ther action.  Railroads  and  sincere  publicists  should  favor  this  commis- 
sion, because  it  will  or  should  separate  the  chaff  of  wrong  and  misrepre- 
sentation from  the  facts  which  are  justly  entitled  to  plead  for  both  sides. 
Congress  should  have  such  a  tribunal,  experienced  and  wise  enough  to 
report  impartially  to  it  upon  the  interests,  duties  and  rights  of  carrying 
corporations  as  well  as  people,  and  to  state  and  formulate  any  proper 
additional  measures  just  to  all.  This  is  better  than  undertaking  to  com- 
prehend it  all  now  through  the  smoked  glass  of  prejudice  or  insufficient 
knowledge. 

In  this  way  harm  to  vested  corporate  or  personal  rights  can  be  best 
avoided,  legislation  made  intelligent,  and  repeals  and  re-enactments 
of  crude  laws  avoided.  The  cautionary  power  of  the  government  will, 
nine  times  in  ten,  stop  the  great  majority  of  the  irregularities  justly  com- 
plained of.  Railways  are  seldom  found  now  to  defend  indefensible  old 
methods.  The  mere  presence  of  the  policeman  on  the  corner  prevents 
affrays.  The  enactment  should  be  wise  and  broad,  yet  concise  and 
practical.  The  government  authorities  should  be  accessible,  their 
authority  prompt,  their  machinery  simple,  their  methods  direct,  yet  their 
discretion  justly  limited. 


INTERPRETATIONS 

OF 

THE    I  N  T  E  R  -  S  T  A  T  E    COMMERCE    LAW. 


The  Trunk  Line  Passenger  Meeting, 

At  a  meeting  of  the  joint  committee  of  general  passenger  agents  of 
the  trunk  .lines  and  their  connections  held  in  New  York  City,  March  4, 
1887:  the  following  report  was  adopted. 

New  York,  March  4.  1887. 

REPORT    OF   THE   SPECIAL   PASSENGER   COMMITTEE. 

It  appears  to  be  impracticable  within  the  time  allotted  to  present  in 
detail  all  the  changes  in  passenger  tariffs,  rules,  and  regulations  which 
may  become  necessary  under  the  operation  of  the  act  to  regulate  com- 
merce, and  the  special  committee  will,  therefore,  attempt  to  state  such 
general  principles  as  they  deem  applicable  in  order  to  bring  the  adminis- 
tration of  passenger  business  within  a  proper  construction  of  the  letter 
and  intent  of  the  law,  and  to  make  such  further  recommendations  for 
changes  in  existing  methods  as  they  deem  expedient  and  desirable,  from 
the  standpoint  of  railroad  policy  and  public  interest, 

Your  committee  are  impressed  that  the  intention  of  the  law  is  to 
prevent  the  imposition  of  unreasonable  and  unjust  fares,  to  eliminate  im- 
proper preferences,  and  to  secure  the  stability  and  publicity  of  passenger 
tariffs.  In  order  to  accomplish  these  wise  and  just  results  without  plac- 
ing unnecessary  restrictions  upon  privileges  which  have  heretofore  been 
enjoyed  by  the  public,  it  seems  necessary  and  proper  to  construe  the  law 
liberalty  with  reference  to  its  general  scope  and  intention. 

JUST  AND  REASONABLE  FARES. 

Y'our  committee  believe  that,  generally,  the  tariffs  now  in  force  for 
regular  and  differential  fares  of  the  first  class  in  the  territory  of  the  joint 
committee  are  just  and  reasonable.  These  consist  of  the  fares  for  first- 
class  unlimited  tickets,  first-class  limited  tickets  for  limited  express  trains, 
and  first-class  limited  tickets  for  continuous  passage  on  ordinary  trains. 
These  classes  cover  by  far  the  greater  portion  of  the 

Second-class  fares  are  in  use  in  both  directions,  but  generally  be- 
tween cities  from  which  considerable  numbers  of  passengers  are  trans- 
ported who  are  willing  to  accept  poorer  accommodations  at  less  cost. 
Under  the  clause  prohibiting  discriminations,  it  will  be  necassary  to  es- 
tablish second-class  fares  to  some  additional  points,  in  order  that  fares  for 

170 


INTER -STATE  COMMERCE    LAW.  171 

a  shorter  distance,  contained  within  the  same  line,  shall  not  be  greater 
than  fares  charged  for  a  longer  distance. 

The  fares  for  foreign  immigrants  arriving  at  the  Atlantic  seaboard  in 
the  steerage  of  ocean  vessels  are  the  lowest  through  fares  which  are  in 
use,  and  are  believed  to  be  not  unjust  nor  unreasonable  toward  the  immi- 
grant. The  Legislature  of  the  State  of  New  York  has  fixed  the  maxi- 
mum for  such  immigrant  passengers  transported  within  its  boundaries, 
and  this  has  the  practical  effect  to  influence  and  control  immigrant  fares 
from  other  points  on  that  seaboard.  We  believe  the  tariff  of  immigrant 
fares  which  will  take  effect  April  1  will  conform  in  all  respects  to  the 
law. 

Having  reference  to  the  various  clauses  against  discrimination  be- 
tween passengers  under  like  conditions,  we  have  arrived  at  the  conclusion 
that  immigrant  fares  ought  not  to  be  used  for  cash  business  at  the  vari- 
ous seaboard  cities  of  the  United  States  and  that  the  concession  to  foreign 
immigrants  must  be  confined  to  orders  or  tickets  which  they  secure 
abroad  in  connection  with  their  through  ocean  passage. 

UNDUE    PREFERENCES. 

The  law  permits  the  giving  of  reduced  fares  to  ministers  of  religion, 
but  it  does  not  permit,  and  clearly  forbids,  the  giving  of  reduced  fares  to 
other  persons  than  ministers  of  religion  and  officers  and  employees  of 
railway  companies,  or  free  transportation  to  any  person  or  class  of  per- 
sons whatsoever  except  to  officers  and  employees  of  railway  companies. 
In  defining  the  term  "ministers  of  religion"  we  accept  the  definition 
given  by  Webster's  Dictionary,  as  follows:  "One  who  serves  at  the 
altar;  one  who  performs  sacerdotal  duties;  the  pastor  of  a  church  only 
authorized  or  licensed  to  preach  the  gospel  and  administer  the  sacraments.'* 

MILEAGE    TICKETS. 

We  recommend  that  the  sale  of  mileage  tickets  be  absolutely  discon- 
tinued as  soon  as  the  consent  of  all  the  roads  not  present  and  whose  as- 
sent is  required  can  be  obtained  to  this  recommendation,  and  that  the 
limit  of  those  sold  shall  not  go  beyond  July  31,  1887. 

Forty-one  companies  concurred  in  the  above.  The  only  line  repre- 
sented at  the  meeting  which  did  not  vote  in  the  affirmative  took  the  mat- 
ter under  advisement,  and  will  reply  as  quickly  as  possible. 

The  officers  of  the  joint  committee  were  requested  to  proceed  at  once 
to  secure  the  vote  of  lines  not  represented  at  the  meeting  and  whose  as- 
sent is  necessary. 

EXCURSION  TICKETS. 

First  We  define  the  term  "Excursion  Tickets,"  as  used  in  section 
22,  to  mean  a  round-trip  ticket,  sold  at  a  reduced  rate  to  a  person  who, 
under  certain  conditions,  desires  to  make  a  journey  within  a  given  time 
to  a  given  point  and  return. 

Adopted  unanimously. 

Second.  We  believe  that  it  is  the  intention  of  the  law  to  leave  all  the 
questions  of  restriction,  limitation,  place  and  fares  for  the  sale  of  excur- 
sion tickets  in  the  discretion  of  the  railway  companies  interested,  respect- 
ively, within  reasonable  limits. 

Adopted,  six  representatives  dissenting. 


172  INTER -STATE    COMMERCE    LAW. 

The  Minority  Report  on  the  above  clause  is  as  follows : 

"  We  believe  that,  if  excursion  rates  are  made,  they  should,  under 

the  law,  be  so  made  as  not  to  unjustly  discriminate  between  persons, 

corporations,  localities,  or  any  particular  description  of  traffic ;  and  that 

such  rates  should  conform  to  the  long  and  short  haul  feature  of  the  law." 

BAGGAGE. 

It  has  been  the  custom  of  railway  companies  to  transport  a  certain 
amount  of  personal  baggage  in  baggage  cars,  provided  for  the  purpose 
on  passenger  trains,  for  which  no  separate  charge  has  heretofore  been 
made.  This  custom  has  varied  somewhat  in  different  sections  of  the 
country,  and  for  different  classes  of  people.  To  the  end  that  a  uniform 
rule  may  be  adopted,  we  recommend  that  the  rule  for  the  free  transpor- 
tation of  personal  baggage  be  as  follows,  and  that  no  greater  excess  be 
allowed  to  go  free,  or  at  different  rates  than  are  named  in  this  general 
rule  : 

(a)  There  may  be  checked  free  on  each  full  first  or  second-class 
ticket,  150  pounds  of  baggage  ;  on  each  half  first  or  second-class  ticket, 
75  pounds  ;  on  each  full  immigrant  ticket,  100  pounds  ;  on  each  half  im- 
migrant ticket,  50  pounds. 

(b)  Baggage  of  first  and  second  class  passengers  weighing  in  excess 
of  the  free  allowance  thus  authorized  shall  be  subject  to  a  charge  of  not 
less  that  12  per  cent,  of  the  lowest  unlimited  first-class  fare  ;  provided, 
however,  that  no  less  charge  than  twenty-five  cents  be  made  in  any  case. 

(c)  No  single  piece  of  baggage  weighing  more  than  250  pounds 
shall  be  checked  as  baggage  by  any  of  these  lines,  except  for  ship  immi- 
grants. 

We  recommend  that  this  concession  apply  only  to  the  personal  bag- 
gage of  travelers,  such  as  covered  and  included  in  decisions  at  common 
law,  to  wit :  the  personal  effects  of  the  traveler,  which  may  include  his 
wearing  apparel,  worn  jewelry,  a  book  for  reading  on  his  journey,  a 
watch, or  other  personal  effects  which  are  not  merchandise,  and  which 
may  vary  according  to  the  condition  in  life  of  the  passenger  and  the 
length  of  his  journey  ;  and  that  no  commercial  luggage,  musical  instru- 
ments, organs,  pianos,  donkeys,  horses  or  theatrical  scenery  be  trans- 
ported as  free  baggage. 

We  recommend  that  all  Excess  Baggage  Order  Books  and  permits 
be  at  once  withdrawn  from  sale. 

COMMISSIONS. 

We  unanimously  recommend  that  the  payment  of  commissions  for 
the  sale  of  passenger  tickets  to  any  agent,  firm,  broker,  scalper,  or  other 
person,  be  absolutely  abolished  by  these  lines  ;  and  that  all  reasonable 
and  proper  influences  be  brought  to  bear  upon  all  connecting  railroads 
beyond  the  territory  of  this  Committee,  to  take  concurrent  action  with- 
out delay.  We  further  recommend  that  all  our  agents  be  prohibited 
from  receiving  commissions  from  other  companies,  and  that  we  urge  all 
other  companies  with  whom  we  interchange  business  to  refrain  from  the 
payment  of  such  commissions  to  our  agents  or  to  other  persons  in  the 
territory  traversed  by  our  lines. 

Adopted  unanimously. 

(92  companies  have  concurred.) 


INTER- STATE    COMMERCE    LAW.  173 

In  accordance  with  this  recommendation,  it  was  agreed  that  the 
Commissioner  of  the  Central  Traffic  Association  prepare  a  circular  to 
send  to  all  ticket  agents  at  once,  stating  that  on  and  after  April  1st,  prox., 
no  commission,  rebate  or  other  drawback  will  be  paid  to  them  by  roads 
represented  in  this  circular. 

That  the  action  taken  here  be  telegraphed  to  the  South- Western 
Association. 

That  a  separate  circular  be  sent  to  the  Traffic  Officers  of  connecting 
roads,  requesting  them  not  to  pay  commissions  to  our  agents,  or  to  others 
in  the  territory  traversed  by  our  lines,  after  the  above  date. 

That  instructions  be  issued  to  the  agents  of  these  companies  that  no 
commissions  must  be  accepted  by  them  from  other  roads  for  the  sale  of 
passenger  tickets  after  March  31,  1887. 

JOINT   THROUGH  TARIFFS. 

In  order  to  establish  joint  tariffs  of  through  fares  where  two  or  more 
connecting  railroads  are  concerned,  and  to  the  end  that  all  the  parties  to 
such  joint  tariff  shall  be  responsible  for  their  proper  observance  in  ac- 
cordance with  law,  we  recommend  that  all  parties  desiring  to  participate 
in  through  business  authorize  the  representative  road  at  each  initial  point 
to  establish  through  fares  by  their  respective  lines,  and  indicate  the  basis 
upon  which  such  through  fares  may  be  made  by  the  issuing  company  ; 
with  the  understanding  that  when  such  authorization  has  been  giver  to 
the  issuing  company  it  can  not  be  withdrawn,  changed  or  modified  by 
any  device,  except  upon  a  similar  formal  notice  to  the  issuing  company. 
In  order  to  secure  this  formal  authorization  we  recommend  that  a  circu- 
lar be  issued  by  the  company  desiring  to  participate  in  joint  through 
fares,  giving  the  proper  authority  to  its  connections  and  inviting 
similar  authority ;  and  that  these  circulars  and  the  replies  thereto 
be  filled  in  the  general  offices  of  the  respective  companies.  We  further 
recommend  that  no  through  tickets  be  sold  by  any  representative 
company  at  any  initial  point  in  the  territory  of  these  committees  over 
any  of  its  connecting  lines  after  April  1st,  prox.,  unless  this  authoriza- 
tion shall  have  been  formally  given,  and  that  all  joint  through  fares 
which  have  not  been  thus  formally  agreed  to  by  each  company  interested 
be  discontinued  from  that  date. 

In  accordance  with  the  abo^e,  the  following  forms  of  circular  letters 
are  recommended  : 

CIRCULAR    LETTER     "  A  "    TO     CONNECTING    LINES    REGARDING    INTER- 
CHANGE  OF   PASSENGER   TRAFFIC — AFTER   MARCH   31,  1887. 


General  Passenger  Agent Ry.  Co., 


Dear  Sir  : — This  Company  is  revising  its  through  passenger  tariffs 
to  take  effect  April  1st  prox.  Copies  of  these  tariffs  will  be  filed  with 
the  Commissioners  at  Washington,  D.  C,  as  required  by  the  Act  to 
Regulate  Commerce. 

It  is  deemed  advisable  to  ask  whether  you  desire  this  Company  to 
continue  to  act,  until  further  notice,  as  agent  for  your  Company  in  the 
issuance  of  snch  forms  of  through  tickets  as  are  now  on  sale  by  this  Com- 


174  INTER -STATE    COMMERCE    LAW. 

pany,  and  at  such  fares  as  have  already  been  agreed  between  us  to  points 
on  or  reached  by  way  of  your  road.  It  is  impracticable  to  submit  the 
new  tariffs  in  detail,  but  they  will  be  made  to  conform  to  the  law,  in 
conference  with  the  representative  of  competing  routes  and  in  accord- 
ance with  the  usual  and  recognized  principles  for  constructing  such 
tariffs. 

When  once  established,  these  joint  tariffs  will  be  strictly  adhered  to 
by  this  Company  until  formally  changed  and  the  changes  advised  to  the 
Commissioners  as  prescribed  by  law. 

In  view  of  the  severe  penalties  to  be  inflicted  in  cases  of  violation  of 
the  law,  this  Company  can  not  consent  to  act  as  agent  for  any  other 
company  in  the  issuance  of  through  tickets  unless  notified  that  it  is 
authorized  to  so  act,  that  the  proposed  joint  tariffs  will  be  satisfactory 
for  the  time  being,  and  that  the  companies  whose  authority  is  thus 
obtained  will  refrain  from  the  payment  of  a  commission,  drawback, 
rebate,  or  any  form  of  consideration,  to  the  agents  or  employees  of  this 
Company,  or  to  any  other  person  or  persons  on  account  of  the  purchase 
or  sale  of  this  Company's  tickets  in  the  territory  adjacent  to  our  line. 

The  necessity  for  a  distinct  understanding  of  the  terms  upon  which 
this  Company  is  willing  to  act  as  your  agent  after  April  1st,  prox.,  is 
obvious. 

A  prompt  and  favorable  reply  will  enable  this  Company  to  complete 
its  arrangements  in  time  to  conform  in  all  respects  to  the  law,  properly 
protect  the  interests  of  all  connections,  and  cause  no  inconvenience  to  the 
general  public. 

For  the  sake  of  uniformity  will  you  kindly  make  your  reply  on  the 
enclosed  blank  circular  letter  "  B,"  noting  thereon  such  special  advices  as 
you  may  desire  to  add. 

We  shall  be  glad  to  continue  to  receive  tickets  issued  by  your  Com- 
pany under  similar  terms  and  conditions;  it  being,  of  course,  understood 
that  in  the  adoption  of  new  forms  not  already  authorized,  we  shall  be 
consulted  as  heretofore.        Respectfully, 


General  Passenger  Agent. 

CIRCULAR  LETTER    "B" — REPLY   TO   CIRCULAR  LETTER    "A." 


General  Passenger  Agent Rd., 


Dear  Sir  : — You  are  authorized  and  requested  to  act  as  this  Com- 
pany's agent  in  the  sale  of  tickets  to  all  points  reached  by  its  lines,  in 
accordance  with  the  terms  of  your  circular  letter  "  A  "  of  . _ 

This  companjr  fully  agrees  with  the  conditions  mentioned  in  your 

said  letter  "A"  of -,as  per  copy  attached  hereto. 

Yours  respectfully, 


G.  P.  and  T.  A. 

RATE    BUREAUS. 

In  order  to  secure,  as  far  as  possible,  stability  and  consistency  in  pas- 
senger fares  throughout  the  territory  of  the  Joint  Committee,  we  recom- 


INTER- STATE    COMMERCE    LAW.  175 

mend  that  rate  bureaus  be  established,  as  early  as  possible,  under  the 
direction  of  the  respective  Passenger  committees,  charged  with  the  duty 
of  publishing  duly  authorized  through  fares  from  points  in  the  territory 
of  the  respective  committees;  and  that  the  joint  tariffs  of  through  fares 
thus  published  be  accepted  by  all  our  companies  as  the  authorized  and 
legal  through  fares  over  these  lines. 

DIFFERENTIAL   PARES. 

It  will  be  admitted  that  some  through  lines  may  fairly  compete  for 
passenger  business,  which,  by  reason  of  length  of  road  or  other  unequal 
facilities,  can  not  maintain  their  usual  volume  of  traffic  at  equal  fares 
with  their  competitors.  Such  lines  will,  doubtless,  in  the  future,  as  they 
have  in  the  past,  undertake  to  charge  the  public  less  for  transportation 
between  common  points  than  their  competitors.  To  prevent  the  confu- 
sion which  would  necessarily  result  from  establishing  such  differences 
without  any  definite  knowledge  of  their  effect  upon  the  currents  of  traf- 
fic, we  recommend  that  differential  fares  for  through  and  competitive 
business  be  established  by  consultation  and  agreement  between  the  rail- 
road companies  interested,  and  that  reports  be  made  of  all  sales  between 
points  where  differential  fares  are  agreed  upon  to  the  principal  office  of 
the  respective  committees;  and  that  comparative  statements  of  such 
business  be  published  to  the  parties  interested,  from  time  to  time,  for 
their  information. 

FILING  AND   PUBLISHING  OF   TARIFFS. 

We  understand  that  local  interstate  fares  must  be  both  filed  with  the 
National  Commission  and  kept  for  public  inspection,  but  that  it  is  only 
necessaiy  to  keep  in  each  station  the  fares  in  effect  from  that  point.  We 
also  understand  that  joint  tariffs  of  through  interstate  fares  must  be  filed 
with  the  Commission  at  Washington,  and  afterwards  published  if  the 
Commission  so  directs,  but  that  no  further  publication  is  required  by  law 
until  the  Commission  shall  have  directed  in  the  matter. 

LONG   AND    SHORT    HAUL. 

Under  the  section  referring  to  the  long  and  short  haul,  we  under- 
stand that  the  law  deals  with  fares  in  the  aggregate,  and  that  the  pro- 
portion of  a  through  fare,  need  not,  of  necessity,  control  local  fares. 

In  the  case  of  greater  charge  for  a  shorter  distance,  by  reason  of  the 
competition  of  water  lines  or  otherwise,  your  committee  believe  that  they 
have  no  right  to  permit  such  fares  to  continue,  or  to  be  made  without  the 
authorization  of  the  National  Commission.  For  instance,  a  special 
limited  rate  of  60  cents  is  made  between  Wilmington  and  Philadelphia 
by  reason  of  river  competition;  the  regular  rate  between  Philadelphia  and 
the  next  station  north  of  Wilmington  being  72  cents;  either  the  local  rate 
should  be  reduced  to  the  Philadelphia  basis,  or  the  National  Commission 
should  authorize  an  exception  and  so  of  all  analagous  cases. 

If  the  fare  from  Portland  to  Chicago,  by  way  of  Boston,  is  made  less 
than  the  fare  from  Boston  to  Chicago  by  the  same  route,  the  roads  con- 
stituting the  route  from  Boston  should  either  reduce  their  Boston  fare  or 
refuse  to  accept  tickets  from  Portland  by  way  of  Boston  at  the  lesser 
rate  without  authority  of  the  National  Commission,  and  so  of  all  anal- 
agous cases. 


176  INTER -STATE    COMMERCE    LAW. 

POOLING. 

Your  committee  understand  that  the  division  of  the  proceeds  of 
passenger  earnings  between  different  and  competing  lines  is  positively 
prohibited.  They,  therefore,  recommend  that  all  settlements  for  bal- 
ances on  passenger  business  accruing  on  and  after  April  1st,  prox.,  be 
discontinued;  but  that  in  all  other  respects  the  organization,  the  agree- 
ments, and  the  business  of  the  Trunk  Line  Passenger  Committee  and 
the  Central  Traffic  Association,  (Passenger  Department)  continue  as 
heretofore,  with  such  addition  or  modification  as  may,  from  time  to 
time,  be  agreed  upon,  not  inconsistent  with  the  law. 

Western  Passenger  Associations. 

The  general  passenger  agents  of  the  lines  of  the  Southwestern,  "West- 
ern and  Northwestern  Passenger  associations,  as  a  result  of  several  ses- 
sions in  Chicago  in  March,  1887,  adopted  the  following  formal  statement 
of  their  interpretation  of  the  interstate  commerce  law  so  far  as  it  pertains 
to  passenger  traffic  and  submitted  it  to  the  general  managers  for  final 
consideration : 


For  more  definite  and  concise  consideration,  the  subject  has  been 
divided  into  the  following  heads  : 

1.  What  does  the  law  specifically  require  to  be  done  by  common 
carriers  subject  to  its  provisions  ? 

2.  What  is  inferentially  permitted  ;  or  consistent  and  not  forbid- 
den ? 

3.  What  does  the  law  specifically  forbid  ? 

4.  What  does  the  law  inferentially  forbid  ;  is  believed  to  be  incon- 
sistent ;  or  is  not  desirable  to  be  done  ? 

SPECIFICALLY  REQUIRED. 

1.  Common  carriers  are  required  (see  section  1  of  the  act)  to  apply 
the  provision  of  the  interstate  law  to  passenger  business  from  one  state 
or  territory  of  the  L'nited  States  or  the  District  of  Columbia  to  any  other 
state  or  territory  of  the  United  States  or  the  District  of  Columbia,  or 
from  any  place  in  the  United  States  to  an  adjacent  foreign  country,  or 
from  an}-  place  in  the  United  States  through  a  foreign  country  to  any 
other  place  in  the  Unite:!  States,  and  to  or  from  a  foreign  country  to  or 
from  any  state  or  territory. 

2.  The  law  requires  that  business  carried  within  the  United  States 
or  territories  to  or  from  adjacent  foreign  countries  shall  be  amenable 
to  the  same  rules  as  apply  to  interstate  business. 

3.  All  charges  made  for  any  service  shall  be  reasonable  and  just. 

4.  For  a  like  and  contemporaneous  service,  and  for  the  transporta- 
tion of  a  like  kind  of  traffic  under  substantially  similar  circumstances 
and  conditions,  a  like  charge  shall  be  made. 

5.  The  law  requires  carriers  according  to  their  respective  powers 
to  afford  all  reasonable,  proper  and  equal  facilities  for  the  interchange  of 
traffic  between  their  respective  lines. 


INTER -STATE    COMMERCE    LAW.  177 

6.  The  law  requires  that  every  common  carrier  shall  plainly  print 
in  large  type,  of  at  least  the  size  of  ordinary  pica,  and  keep  for  public 
inspection  in  eveiy  depot  or  station,  in  such  places  and  in  such  form  that 
they  can  be  conveniently  inspected,  schedules,  showing  the  rates  of  fare 
for  transportation  of  passengers  and  property  (including  baggage)  which 
are  in  force  upon  its  railroads,  plainly  stating  the  places  upon  the  rail- 
road between  which  passengers  and  property  will  be  carried. 

7.  The  law  requires  ten  da}Ts'  notice  of  any  advance  in  rates,  which 
notice  shall  plainly  state  changes  proposed  to  be  made,  and  the  time 
when  the  changes  will  go  into  effect,  and  that  such  changes  be  shown 
by  printing  new  schedules,  or  be  plainly  indicated  upon  the  schedules  in 
force  at  the  time  and  kept  for  public  inspection.  Reductions  may  be 
made  without  previous  public  notice,  but  when  made  notice  of  the  same 
shall  be  immediately  publicly  posted,  and  shall  be  immediately  made 
public  by  printing  new  schedules,  or  shall  immediately  be  plainly  indi- 
cated upon  the  schedules  at  the  time  in  force,  and  kept  for  public  in- 
spection. 

8.  Every  common  carrier  shall  file  its  tariffs  with  the  commission, 
and  shall  properly  notify  said  commission  of  all  changes  made  in  the 
same. 

9.  Every  common  carrier  shall  file  with  the  commission  copies  of 
all  contracts,  agreements  or  arrangements  with  other  common  carriers, 
or  joint  tariffs,  which  shall  be  made  public  when  directed  by  the  com- 
mission, said  commission  to  prescribe  the  measure  of  publicity. 

10.  The  law  authorizes  the  commission  to  require  annual  reports 
in  such  detail  and  in  such  manner  as  the  commission  may  require. 

11.  (Proposition  under  section  6  of  the  act.)  This  law  requires  the 
publication  of  tariff  rates  which  apply  only  to  roads  owned,  operated, 
leased  or  controlled  by  each  independent  corporation. 

Example  :  The  Chicago  and  Northwestern  Railway  is  not  required 
to  publish  rates  from  its  stations  to  points  on  the  Chicago,  St.  Paul,  Min- 
neapolis and  Omaha  Railway. 

12.  The  mandate  as  to  the  observance  of  posted  fares  being  in  the 
local  portion  of  this  section.  Is  there  anything  in  this  law  prohibiting 
the  changing  of  coupon  rates  without  any  notice;  or,  in  other  words, 
does  it  prohibit  cutting  of  coupon  rates? 

Answer— Ten  days'  notice  of  advance  must  be  given,  and  immediate 
notice  of  reduction. 

13.  Are  competing  lines  compelled  to  interchange  business  from  a 
common  point  to  a  point  local  to  one  of  them,  and  on  which  that  one 
Avould  otherwise  get  the  entire  haul? 

Example :  Could  the  Chicago  and  Northwestern  Railway  ticket 
Chicago  to  LaCrosse  over  its  road,  and  then  over  the  Chicago,  Milwaukee 
and  St.  Paul  Railway  to  a  local  station  on  the  latter  road  without  its  con- 
sent. 

Answer — No. 

Provided,  however,  that  if  such  connecting  line  receives  business 
from  one  connection,  it  must  not  discriminate  against  other  connections* 

INFERENTIALLY   PERMITTED,    AND    NOT   FORBIDDEN. 

1.  The  law  inferentially  permits  first,  second  and  third  (emigrant) 
classes  of  passengers  if  the  accommodations  are  as  varied  as  the  classes. 


ITS  INTER- STATE    COMMERCE    LAW. 

Children  under  five  years  of  age,  accompanied  by  parents  or  guardians, 
may  be  carried  free.  Children  of  five  and  under  twelve  years  of  age 
may  be  carried  at  half  fare. 

2.  The  law  inferentially  permits  special  additional  charge  for  spe- 
cial train  or  other  unusual  service;  for  instance,  special  train  to  be  char- 
tered from  Chicago  to  St.  Paul  at  a  special  rate. 

3.  The  law  Inferentially  permits  a  variation  in  charges  based  upon 
the  restricted  availabitity  of  "the  ticket.  For  example,  a  ticket  limited  to 
continuous  passage  between  two  points  may  be  consistently  sold  at  less 
than  the  unlimited  fare  between  the  same  points. 

4.  The  law  inferentially  permits  the  issuance  of  mileage,  excursion, 
or  commutation  passenger  tickets,  but  does  not  permit  a  discrimination 
in  favor  of  any  person.  For  example,  rates  made  in  favor  of  Grand 
Army  of  the  Republic  or  any  other  organized  body,  religious,  secular, 
secret,  etc. ,  must  be  contemporaneously  available  to  any  person. 

5.  It  inferentially  permits  reduced  rates  to  ministers  of  religion,  and 
free  transportation  to  railway  employees. 

6.  As  the  greater  includes  the  less,  it  also  inferentially  permits  the 
issue  of  reduced  rates  to  railway  employees. 

7.  It  is  understood  that  the  managers  expect  the  general  passenger 
agents  to  say  whether  commissions  are  permitted  under  the  law,  and 
we  therefore  report  that  there  is  nothing  in  the  law  in  relation  to  com- 
missions any  more  than  there  is  in  relation  to  payment  of  any  other  com- 
pensation of  any  character.  It  will  be  for  the  managers  to  determine 
whether  the  payment  of  commissions  shall  be  continued. 

8.  The  question  of  passes  or  reduced  rates  for  the  families  of  rail- 
way employees  is  referred  to  the  general  managers  for  determination. 

"  9.     May  mileage  tickets  be  sold  at  any  rate  (not  greater  than  the 
legal  fare)  that  the  common  carrier  may  elect  to  charge? 
Answer — Yes. 

10.  May  they  be  sold  at  different  rates  to  different  individuals  or 
firms? 

Answer — No. 

11.  Id  regard  to  the  issue  of  mileage  tickets  the  general  passenger 
agents  recommend  to  the  general  managers  that  thousand  mile  tickets,  if 
sold,  must  be  sold  to  every  person  at  the  same  price,  that  each  ticket 
shall  be  restricted  to  use  by  the  person  whose  name  shall  be  entered  upon 
the  ticket,  and  that  they  shall  be  sold  at  a  uniform  rate  per  mile,  2£  cents 
per  mile  is  recommended;  that  each  book  shall  be  good  for  one  thousand 
miles,  no  more  nor  less,  and  its  validity  shall  be  limited  to  one  year  from 
date  of  sale;  baggage  allowance  to  be  the  same  for  regular  travelers. 

12.  May  short  line  mileage  be  detached  by  a  longer  line  between 
two  competitive  points?  Example:  By  one  line,  Chicago  to  Kansas 
City,  521  miles,  as  against  short  line  distance,  488? 

Answer — Yes,  provided  a  greater  mileage  is  not  detached  for  an 
intermediate  haul  over  the  same  line  in  the  same  direction. 

13.  May  a  common  carrier,  making  a  differential  or  special  fare 
over  its  own  line,  lawfully  refuse  to  grant  to  a  connecting  line  the  right 
to  use  such  fare  contemporaneously  from  the  line  or  territory  of  such 
connecting  road  ? 

Answer — Yes. 


INTER- STATE    COMMERCE    LAW.  179 

14.  May  a  ticketing-  road  charge  more  or  less  for  same  kind  of 
ticket  between  two  intermediate  points  by  one  connection  than  by 
another  competing  connection?  For  example,  can  Michigan  Central 
legally  charge  $19,  Chicago,  111.,  to  Albany,  N.  Y.,  by  its  New  York 
Central  connection,  and  $16.65  via  its  West  Shore  connection,  as  per 
quotation  in  Central  Traffic  association  special  tariff  ? 

Answer — Yes,  because  of  dissimilar  circumstances  and  conditions. 

15.  May  a  higher  rate  be  legally  charged  between  two  points  for  a 
regular  first-class  ticket,  in  the  absence  of  any  other  rate  or  ticket 
between  them,  than  for  a  restrictive  or  lower-grade  ticket  between  one  of 
the  points  and  the  farther  point,  or  between  two  outlying  points,  or  a 
longer  haul  over  the  same  line,  including  the  shorter  haul  between  the 
first  two  points  ;  or  would  the  failure  to  provide  the  same  grade  or  kind 
of  ticket  at  a  consistent  (not  higher)  rate  between  the  shorter  as  between 
the  longer  haul  points  be  an  offense  as  per  section  10  ? 

Answer — While  the  law  inferentially  permits  the  acceptance  of 
lower  than  first-class  rate  for  a  ticket  of  restricted  availability,  it  also 
requires  the  observance  of  the  long  and  short  haul  principle. 

16.  Does  the  proportion  received  on  a  through  ticket  determine  or 
affect  the  local  charge,  both  interstate?  For  example  :  Council  Bluffs 
to  Chicago,  $12.50  ;  proportion,  Council  Bluffs  to  Chicago  on  ticket 
Council  Bluffs  to  Cincinnati,  say  $10.  Must  the  line  withdraw  the 
through  ticket,  or  reduce  its  local  to  $10  ? 

Answer — No. 

17.  Must  regular  local  or  any  other  rates  be  printed  and  shown  only 
between  such  stations  as  the  railroad  deems  it  good  business  policy  to 
sell? 

Answer— Yes. 

18.  If  general  passenger  or  ticket  office  sells  tickets  for  interstate 
hauls  between  various  points  on  its  railroad,  must  it  be  governed  by 
same  rule  as  to  publishing  and  posting  the  rates  as  in  case  of  a  regular 
station  ticket  office? 

Answer — Yes. 

19.  Does  the  exemption  in  section  22,  that  "  this  act  shall  not  apply 
to  issuance  of  mileage,  excursion  and  commutation  tickets  "  exempt  also 
the  publication  of  the  rates  therefor  between  interstate  points  ? 

Answer — Yes,  it  does  exempt  the  publication  of  such  rates. 

WHAT   IS  FORBIDDEN  ? 

1.  The  law  forbids  special  rates,  rebates,  drawbacks,  or  any  other 
device  whereby  a  rate  can  be  reduced  or  increased  to  work  discrimina- 
tion against  any  person. 

2.  The  law  forbids  any  undue  or  unreasonable  preferences  to  any 
person,  company,  firm,  corporation,  or  locality. 

3.  Section "4  of  this  act  forbids  greater  compensation  for  a  shorter 
than  for  a  longer  haul  over  the  same  line,  in  the  same  direction,  etc.,  but 
provides  that  ' '  this  shall  not  be  construed  as  authorizing  any  common 
carrier  within  the  terms  of  this  act  to  charge  and  receive  as  great  com- 
pensation for  a  shorter  as  for  a  longer  distance." 

Question — (a)  Does  the  law  require  a  less  rate  for  a  shorter  distance 
than  for  a  longer  distance  (6  yeas,  8  nays)  ? 


180  INTER -STATE    COMMERCE    LAW. 

(b)  What  the  law  does  not  forbid  is  permissible,  providing  it  is  rea- 
sonable and  just  (13  jreas  ;  1  nay). 

(c)  What  the  law  says  it  does  not  authorize  it  does  not  permit  (4 
yeas,  10  nays). 

4.  We  are  of  the  opinion  that  the  law  prohibits  the  pooling  of  pas- 
senger earnings. 

5.  The  law  prohibits  charging  or  accepting  a  greater  or  less  com- 
pensation than  the  rates  as  established  and  published. 

6.  The  law  only  inferentially  permits  us  to  give  reduced  rates  to 
ministers  of  religion,  but  it  does  not  permit  us,  and  it  clearly  forbids,  the 
giving  reduced  rates  or  free  transportation  to  any  other  class,  in  which 
would  be  included  the  following  :  Theatrical  companies,  base-ball  play- 
ers, bicyclists,  theatical  advance  agents,  students,  laborers,  lumbermen, 
Indians  (wards  of  the  nation),  United  States  officers  and  soldiers  or  their 
families,  inmates  of  national  home  for  disabled  volunteer  soldiers,  city 
police,  members  of  the  press  (as  courtesies,  hotel  employees,  freight  ship- 
pers, charity  cases,  deaf,  dumb,  and  blind  people,  temperance  work- 
ers, etc. 

We  suggest  to  the  general  managers  for  consideration,  whether 
some  of  the  most  worthy  of  these  cases  can  not  be  continued  and 
reserved  for  adjustment  under  the  direction  of  the  commission. 

INFERENTIALLY   FORBIDDEN,    ETC. 

1.  The  law  inferentially  prohibits  the  issue  of  free  or  reduced  trans- 
portation upon  an  indefinite  basis  to  pay  for  advertising,  or  for  any 
other  alleged  service,  or  for  influence,  in  such  manner  as  to  work  dis- 
crimination between  persons  (11  yeas,  3  nays). 

2.  It  is  recommended  that  the  issue  of  transportation  in  exchange 
for  services  or  commodities  of  any  character  be  not  permitted  (7  yeas,  7 
nays). 

3.  A  fair  interpretation  of  the  clause  which  forbids  unreasonable 
preferences  to  any  firm,  company,  corporation,  person,  or  locality, 
would  inferentiall}1"  forbid  the  giving  away  of  transportation  as  a  gra- 
tuity or  compliment  to  any  particular  class  or  classes  of  persons  not  ex- 
cepted in  section  22  of  the  act. 

4.  Can  a  through  interstate  fare  be  legally  charged  which  is  greater 
than  the  combination  of  intermediate  local  fares  of  the  common  carrier 
or  carriers  for  the  route  taken  ? 

Answer — No.  Not  if  the  separate  fares  constituting  the  combina- 
tion or  lines  are  of  the  same  class,  circumstances  and  conditions. 

5.  Would  it  be  unlawful  for  a  company  regularly  ticketing  from 
Chicago  to  St.  Louis  to  refuse  to  sell  a  passenger  a  ticket  to  St.  Louis, 
who  ask  for  such  a  ticket,  and  instead  thereof  to  ticket  the  passenger 
from  Chicago  to  East  St.  Louis,  which  would  have  the  effect  of  evading 
the  provisions  of  the  interstate  law  ? 

Answer — It  would  be  inferentially  forbidden. 

6.  Would  it  be  unjust  or  inconsistent  for  a  road  carrying  between 
two  interstate  points  to  make  a  lower  rate  bteween  those  two  points  than 
a  rate  between  two  intermediate  points  on  the  same  line  lving  within  one 
state  ? 

Answer — Yes. 


INTER. STATE    COMMERCE    LAW.  181 

7.  If,  owing  to  competition,  a  railroad  company  makes  a  low  rate 
between  two  interstate  points,  may  it  decline  to  ticket  between  interme- 
diate stations  across  the  state  line  in  order  to  save  its  locals  from  being 
cut  by  the  through  rate  ?  For  example,  if  the  Chicago,  Rock  Island  & 
Pacific  railway  should  make  a  rate  of  $8  between  Chicago  and  Council 
Bluffs  to  meet  competition,  could  it  decline  to  sell  from  Joliet  to  Atlan- 
tic, Iowa,  and  force  passengers  to  buy  from  Joliet  to  Davenport,  $4.22, 
and  from  Davenport  to  Atlantic,  $7.73,  making  an  aggregate  charge  of 
$11.95,  which  would  have  the  effect  of  evading  the  long  and  short  haul 
mandate  ? 

Answer — No. 

GENERAL  RECOMMENDATIONS. 

1.  In  case  of  a  sudden  reduction  in  regular  fares,  St.  Louis  to  New 
York,  and  a  ticket  were  sold  to  New  York  from  Kansas  City  via  St. 
Louis,  based  upon  a  former  or  higher  rate  in  effect  previous  to  the  re- 
duction, and  such  sale  was  made  before  the  Kansas  City  line  had  an  op- 
portunity to  revise  and  place  its  through  rate  to  New  York  in  harmony 
with  the  reduction  east  of  St.  Louis,  would  such  issuing  line  from  Kan- 
sas City  be  obliged  to  refund  the  difference  in  fares  east  of  St.  Louis  ? 

Answer — No. 

Furthermore  would  it  be  open  to  infliction  of  any  penalty  for  charg- 
ing a  greater  through  fare  from  Kansas  City  to  New  York  than  the  sum 
of  the  local  fares  from  Kansas  City  to  St.  Louis  and  St.  Louis  to  New 
York? 

Answer — No  ;  for  the  reason,  see  section  6,  paragraph  5,  of  the  act, 
which  "provides  that  no  common  carrier  party  to  a  joint  tariff  shall  be 
liable  for  the  failure  of  any  other  party  thereto  to  observe  and  adhere  to 
the  rates,  fares  or  charges  thus  made." 

2.  Does  the  law  require  that  interstate  fares  be  the  same  in  both 
directions  ? 

Answer— No. 

3.  Is  it  consistent  or  desirable  to  continue  the  sale  of  excess  baggage 
books  at  a  reduction,  say  of  10  per  cent,  from  the  published  extra  bag- 
gage tariff  rates — (yeas  12,  nays  2)? 

4.  Does  the  law  require  that  holders  of  second  or  third  class  (emi 
grant)  tickets,  purchased  at  through  fares,  based  upon  or  yielding  first 
class  proportions  for  a  portion  of  an  interstate  haul,  shall  be  given  first 
class  accommodations  for  that  portion  of  the  haul  ? 

(At  present  time  immigrant  fare  from  New  York  to  Council  Bluffs 
is  based  upon  an  immigrant  or  third  class  rate  from  New  York  to  Chi- 
cago, added  to  a  first  class  rate  or  proportion  from  Chicago  to  Council 
Bluffs.) 

Answer — The  common  carrier  issuing  the  through  ticket  from  New 
York  designates  such  ticket  as  an  immigrant  ticket.  Question  referred 
to  the  managers  to  determine  whether  the  law  will  deal  with  the  class  of 
tickets  as  a  whole  or  take  cognizance  of  the  proportions  received  by  each 
individual  company  and  require  accommodations  to  be  furnished  in 
accordance  with  the  separate  proportions  received.  The  answer  of  the 
general  passenger  agents  to  the  questions  would  be  no. 

5.  Does  the  law  apply  to  business  ticketed  from  an  adjacent  foreign 


182  INTER-  STATE    COMMERCE    LAW. 

country  to  an  adjacent  foreign  country  passing  through  the  United  States 
■or  territories? 

Answer — No,  beause  it  is  international  business. 

6. — Do  the  provisions  of  this  act  apply  to  traffic  from  a  point  in  one 
state  to  another  point  in  the  same  state,  even  though  part  of  the  route 
lies  through  another  state?  As,  for  example,  Marinette,  Wis.,  to  Flor- 
ence, Wis.,  via  Chicago  &  North- Western  railway,  through  Michigan 
(yeas  5,  nays  9). 

7.  As  free  passes  or  tickets  to  other  than  railroad  employees  are 
prohibited,  free  passage,  free  mileage,  or  other  free  tickets  for  interstate 
hauls  issued  on  various  accounts  previous  to  the  date  on  which  the  law 
takes  effect  will  then  be  contrary  to  law,  they  should  not  be  accepted  for 
passage  and  should  be  recalled. 

8.  Certificates  or  orders  for  return  tickets  may  be  honored  as  com- 
ing under  the  head  of  excursion  business  and  are  exempt;  but  no  con- 
tracts should  be  made  to  extend  beyond  April  4,  1887. 

9.  The  question  of  unexpired  contracts  involves  legal  questions, 
which,  we  have  the  opinion,  can  be  better  settled  by  the  law  department 
than  by  us,  and  is,  therefore,  submitted  to  the  managers. 

10.  Must  each  ticketing  line  make  ail  its  rates  an  equal  rate  per  mile 
per  classification  between  alHnterstate  points? 

Answer — No. 

11.  Must  all  stations  be  furnished  alike  with  all  of  same  kinds  or 
classes  of  tickets  and  rates  that  may  be  provided  or  quoted  to  or  through 
these  station?  For  example,  if  Chicago,  Burlington  &  Quincy  railroad 
provides  certain  tickets  and  rates  from  Chicago  to  San  Francisco,  must 
it  do  so  from  all  its  other  stations  to  all  intermediate  stations  east  of  San 
Francisco  on  all  the  routes  by  which  it  tickets  in  the  first  instance? 

Answer — No. 

12.  The  form  of  publishing  local  ticket  and  excess  baggage  tariffs 
must  be  a  matter  of  detail  to  be  settled  by  each  company  in  accordance 
with  its  own  circumstances. 

13.  In  case  of  a  through  rate  made  on  two  joint  tariffs  (Chicago  to 
Kelton,  made  Chicago  to  Missouri  river  and  Missouri  river  to  Kelton, 
for  example,)  would  the  filing  of  joint  tariffs  (Chicago  rate  sheet  and 
rate  sheet  of  lines  from  Missouri  river  respectively)  be  sufficient? 

Answer — Yes. 

14.  Where  a  railroad  issues  its  own  through  coupon  tariff  to  inter- 
state points,  and  states  on  the  tickets  sold,  as  per  rates  therein,  that  it  acts 
only  as  agent  for  transportation  beyond  its  own  lines,  is  such  a  tariff  a 
joint  tariff  within  the  meaning  of  this  section? 

Answer — Yes. 

15.  If  an  excursion  rate  were  made  for  a  longer  haul,  would  it  be 
concurrently  or  on  the  same  day  required  that  the  same  rate,  or  graded 
rate,  should  be  made  for  the  shorter  haul  included  in  the  longer  haul? 

Answer — No,  not  obligatory. 

16.  May  summer  or  winter  tourist  rates  be  made  for  long  haul 
without  making  the  same  or  correspondingly  low  rates  for  shorter  hauls 
on  the  same  line? 

Answer — Yes. 

17.  The  matter  of  permitting  the  holders  of  second-class  tickets, 


INTER -STATE    COMMERCE    LAW.  183 

purchased  at  second-class  fares,  to  ride  in  first-class  cars  is  referred  to  the 
managers  with  the  recommendation  that  second-class  fares  be  revised  with 
a  view  to  their  partial  or  total  abolition  locally. 

18.  It  is  recommended  to  the  general  managers  that  whatever  regu- 
lations may  be  adopted  for  the  conduct  of  interstate  passenger  business 
shall  also  be  applied  to  passenger  business  within  any  one  state  or  terri- 
tory. 

The  Southern  Passenger  Associations. 

The  Southern  Passenger  Association  adopted  the  following  interpre- 
tation of  the  interstate  commerce  law  at  a  meeting  held  in  New  York, 
March  25,  1887  : 

WHAT    THE    LAW  FORBIDS. 

1.  It  forbids  special  rates,  rebates,  drawbacks,  or  any  other  device 
whereby  a  rate  can  be  reduced  or  increased  to  work  discrimination 
against  any  person,  or  give  any  undue  or  unreasonable  preference  to  any 
person,  company,  firm,  corporation,  or  locality. 

2.  It  forbids  greater  compensation  for  a  shorter  than  for  a  longer 
haul  over  the  same  line  in  the  same  direction  under  substantially  similar 
circumstances  and  conditions. 

3.  It  forbids  the  pooling  of  passenger  earnings. 

4.  It  forbids  charging  a  greater  or  less  compensation  than  the  rates 
as  established  and  published. 

5.  It  forbids  the  giving  of  reduced  rates  or  free  transportation  to 
anv  person  or  class  of  persons  whatsoever,  except  as  provided  in  section 
22  of  the  law. 

WHAT   THE   LAW   REQUIRES. 

6.  That  all  charges  for  the  transportation  of  passengers  and  baggage 
shall  be  reasonable  and  just. 

7.  Like  charges  shall  be  made  for  like  and  contemporaneous  service 
under  substantially  similar  circumstances  and  conditions. 

8.  All  reasonable,  proper,  and  equal  facilities  shall  be  afforded  by 
earners  for  the  interchange  of  traffic  between  their  respective  lines  and 
connections. 

9.  Each  common  carrier  subject  to  this  law  shall  print,  in  large 
type  of  at  least  the  size  of  ordinary  pica,  and  keep  for  public  inspection 
in  every  depot  or  station,  in  such  places  as  may  be  convenienthy 
inspected,  schedules  showing  the  rates  of  fares  for  transportation  of  pas- 
sengers and  property  (including  baggage),  plainly  stating  the  places 
upon  the  railroads  between  which  passengers  and  property  will  be 
carried. 

10.  Ten  days'  notice  of  advance  in  rates  shall  be  given,  which  notice 
shall  plainly  state  changes  proposed  and  the  time  they  go  into  effect; 
such  changes  to  be  shown  by  printing  new  schedules,  or  be  plainly  indi- 
cated upon  the  schedules  in  force. 

11.  Reductions  may  be  made  without  previous  public  notice,  but 
when  made,  notice  of  the  same  shall  be  immediately  publicly  posted  or 
plainly  indicated  upon  the  schedules  in  force. 

12.  Every  common  carrier  subject  to  this  law  is  required  to  file  its 


184  INTER -STATE    COMMERCE    LAW. 

tariffs  with  the  commission,  and  to  promptly  notify  the  commission  of  all 
changes  made  in  the  tariffs. 

13.  Copies  of  all  contracts,  agreements,  or  arrangements  with  other 
common  carriers,  and  copies  of  joint  tariffs,  are  required  to  be  filed  with 
the  commission.  Such  joint  tariffs  shall  be  made  public  when  directed 
by  the  commission. 

14.  Annual  reports  shall  be  rendered  as  the  commission  may 
require. 

WHAT  THE  LAW   PERMITS. 

15.  The  law  permits  different  classes  of  passenger  fares,  and  rates 
may  be  as  varied  as  the  classes  of  accommodation. 

16.  An  additional  charge  may  be  made  for  special  or  unusual 
service. 

17.  Variation  in  charges  may  be  based  upon  the  restricted  availa- 
bility of  tickets. 

18.  Mileage,  excursion,  or  commutation  tickets  may  be  issued,  pro- 
vided they  be  in  accordance  with  the  general  non-discriminating  spirit 
of  the  act. 

19.  Reduced  rates  may  be  given  to  ministers  of  religion  and  rail- 
way employees. 

20.  Free  transportation  may  be  given  to  officers  and  employees  of 
railroads. 

21.  Excursion  rates  may  be  made,  in  the  discretion  of  railroads, 
within  reasonable  limits,  provided  such  rates  shall  give  no  undue  or 
unreasonable  preference  to  any  particular  person,  company  or  locality. 

22.  The  law  recognizes  just  discrimination  from  the  fact  that  it  pro- 
hibits unjust  discrimination. 

ADDITIONAL    CONCLUSIONS. 

23.  Free  transportation  prohibited  by  law  should  be  recalled  on  or 
before  April  4th,  1887. 

24.  The  present  local  and  through  passenger  fares  in  the  territory  of 
this  association  are  just  and  reasonable. 

25.  The  term  "  excursion  tickets,"  as  used  in  section  22,  means 
round-trip  tickets  sold  subject  to  certain  conditions  for  a  journey  within 
a  given  time  to  a  given  point  and  return. 

26.  Any  company  which,  with  its  connivance  or  consent,  permits  a 
' '  scalper  "  to  sell  tickets  at  less  than  tariff  will  be  liable  the  same  as  if 
the  act  was  committed  by  its  own  agent. 

27.  A  greater  amount  of  baggage  checked  free  for  one  person  than 
another  on  the  same  class  of  ticket,  would  be  an  unjust  discrimination. 

28.  It  is  not  an  unreasonable  discrimination  for  fast  express  trains  to 
stop  at  large  stations  only. 

29.  Railroads  are  not  required  to  give  the  same  representation  in 
tickets  and  baggage  checks  to  all  connections  alike,  regardless  of  the  re- 
quirements of  the  traffic. 

30  Railroads  maintaining  through  car  lines  with  one  connection  are 
not  required  to  maintain  similar  through  car  lines  with  all  other  connec- 
tions between  the  same  common  points;  the  great  number  and  variety  of 
different  connecting  lines  between  such  common  points  would  render  such 
obligation  unnecessary,  unreasonable  and  unjust. 


INTER -STATE    COMMERCE    LAW.  185 

31.  In  order  to  establish  joint  tariffs  of  through  fares  where  two  or 
more  connecting  railroads  are  concerned,  to  the  end  that  all  parties  to 
such  joint  tariff  shall  be  responsible  for  their  proper  observance  in 
accordance  with  law,  all  parties  desiring  to  participate  in  through  busi- 
ness with  members  of  this  association,  or  with  roads  connecting  there- 
with by  which  through  fares  are  established,  must  indicate  the  basis 
upon  which  such  through  fares  may  be  made  by  the  issuing  company, 
with  the  understanding  that  when  such  through  authorization  has  been 
given  to  the  issuing  company  it  can  not  be  withdrawn,  changed  or  modi- 
fied by  any  device,  except  upon  like  formal  notice  to  the  issuing  com- 
pany. In  order  10  secure  this  formal  authorization,  a  circular  shall  be 
issued  by  the  company  desiring  to  participate  in  joint  through  fares, 
giving  the  proper  authority  to  its  connections  and  inviting  similar  author- 
ity; and  that  such  circulars  and  replies  thereto  be  filed  in  the  general 
offices  of  our  respective  companies.  M.  Slaughter. 

Commissioner. 

New  England  Railway  Managers. 
A  meeting  of  presidents  and  general  managers  of  the  principal  New 
England  railways  was  held  in  Boston,  March  10,  to  consider  the  inter- 
state commerce  law.     There  were  present  84  officers,  representing  the 
following-named  thirty -four  railroads  : 

Boston  &  Albany,  Boston  &  Lowell,  Boston  &  Providence,  Boston,  Hoosac  Tunnel  & 
Western,  Central  Vermont,  Cheshire,  Concord,  Connecticut  &  Passumpsic  Rivers,  Con- 
necticut River,  Fitchburg,  Hartford  &  Connecticut  Western,  Housatonic,  Knox&  Lincoln, 
Maine  Central,  Milford  &  Woonsocket,  Naugatuck,  New  Brunswick,  Newburg  Dutchess 
&  Connecticut,  New  Haven  &  Derby,  New  Haven  &  Northampton,  New  York  &  New 
England,  New  York  City  &.  Northern,  New  York,  New  Haven  &  Hartford,  New  York, 
Providence  &  Boston,  Old  Colony,  Pennsylvania,  Portland  &  Ogdensburg,  Providence  & 
Worcester,  Providence,  Warren  &  Bristol,  Quebec,  Ottawa  &  New  England,  Air  Line, 
Rome,  Watertown  &  Ogdensburg,  South-Eastern,  Troy  &  Boston,  and  Vermont  Valley. 

Hon.  Charles  F.  Choate,  president  of  the  Old  Colony,  was  elected 
chairman  and  Mr.  C.  S.  Mellen,  general  superintendent  of  the  Boston  & 
Lowell,  was  elected  secretary.  After  the  chair  had  stated  the  object  of 
the  meeting,  vice-president  Shinn  of  the  New  York  &  New  England 
moved  that  a  committee  of  six  be  appointed  to  consider  the  different  sub- 
jects which  are  touched  upon  by  the  law,  and  Messrs.  Shinn  of  the  New 
England,  Whitmore  of  the  Fitchburg,  Furber  of  the  Boston  &  Maine,. 
Mills  of  the  Boston  &  Albany,  Turner  of  the  Boston  &  Lowell  and 
Shepard  of  the  New  York,  New  Haven  &  Hartford,  were  appointed. 
The  committee  reported  twelve  interrogatories,  which  appear  hereafter. 

It  was  voted  to  refer  the  different  topics  to  committees  who  should 
carefully  consider  the  several  propositions  and  report  upon  them  at  an 
adjourned  meeting. 

The  first  section  was  referred  to  a  committee  of  presidents  consisting 
of  Messrs.  George  C.  Lord  of  the  Boston  &  Maine,  A.  B.  Harris  of  the 
Passumpsic,  W.  A.  Russell  of  the  Cheshire,  Edwin  Morey  of  the  Boston 
&  Lowell  and  J.  Gregory  Smith  of  the  Central  Vermont. 

The  second  section  was  referred  to  a  committee  of  general  passenger 
agents  consisting  of  Messrs.  A.  C.  Kendall  of  the  New  York  &  New 
England,  George  L.  Connor  of  the  Old  Colony,  0.  H.  Briggs  of  the  New 

13 


186  INTER -STATE    COMMERCE    LAW. 

York,  Providence  &  Boston,  J.  R.  Watson  of  the  Fitchburg,  and  S.  W. 
Cumrnings  of  the  Central  Vermont. 

The  third,  fourth  and  sixth  sections  were  referred  to  a  committee  of 
general  freight  agents,  consisting  of  Messrs.  Charles  Rockwell  of  the  New 
York,  New  Haven  &  Hartford,  H.  E.  Howard  of  the  Vermont  Valley, 
W.  J.  C.  Kenney  of  the  Boston  &  Maine,  H.  B.  Chapin  of  the  Boston  & 
Albany,  and  C.  L.  Hartwell  of  the  Fitchburg. 

The  fifth,  seventh,  eighth,  ninth,  tenth  and  eleventh  sections  were 
referred  to  the  committee  of  presidents. 

The  twelfth  section  was  referred  to  a  committee  consisting  of  Messrs. 
G.  H.  Williams  of  the  New  York  &  New  England,  S.  G.  Putnam  of  the 
Old  Colony,  W.  F.  Berry  of  the  Boston  &  Maine,  W.  H.  Morrill  of  the 
Boston  &  Providence,  C.  N.  Yeamens  of  the  New  Haven  &  Northamp- 
ton, H.  N.  Turner  of  the  Boston  &  Lowell,  J.  M.  Williams  of  the  New 
York,  Providence  &  Boston,  John  Porteus  of  the  Central  Vermont, 
H.  C.  Folsom  of  the  Passumpsic,  W.  S.  Eaton  of  the  Maine  Central  and 
Samuel  Barrett  of  the  Concord. 

At  the  adjourned  meeting,  March  17,  the  committee  of  presidents, 
to  which  was  referred  several  questions  propounded  at  the  previous  meet- 
ing, presented  the  following  report  upon  them  : 

REPORT  OF  COMMITTEE  OF  PRESIDENTS. 

i.  Free  passes — Does  section  2,  taken  in  connection  with  section  22,  prohibit  the 
issuance  of  free  passes,  except  for  the  officers  and  employees  of  railroad  companies  ? 

Ans.  —  In  answer  to  this  question  the  committee  voted  "  that  the 
usual  courtesies  heretofore  extended  to  the  families  of  the  officers  and 
employees  of  railroad  companies  are  not  prohibited  and  should  be  contin- 
ued, but  that,  in  the  opinion  of  the  committee,  it  would  be  in  contraven- 
tion of  the  spirit  of  sections  2  and  22  of  the  interstate  commerce  law  to 
issue  free  passes,  except  as  above,  and  they  therefore  recommend  con- 
formity to  this  interpretation  of  the  law." 

As  questions  5,  7,  9,  10  and  11  were  of  such  a  nature  that  the  com- 
mittee wished  for  legal  advice  before  making  a  report,  they  voted  to 
submit  them  to  Hon.  Richard  Olney,  A.  A.  Strout  and  George  A.  Torrey, 
for  their  opinion,  said  gentlemen  being  respectively  counsel  for  the  Bos- 
ton <fc  Maine,  Boston  &  Lowell,  and  Fitchburg  railroads.  After  receiv- 
ing their  report,  and  after  a  conference  with  them,  it  was  voted  to  adopt 
the  language  of  their  answers  to  the  questions  in  making  a  report  to  the 
convention. 

5.  Are  contracts  which  have  been  made  with  shippers  for  transportation  of  freight 
which  have  not  expired  prior  to  April  5,  rendered  void  by  the  interstate  commerce  law? 

Ans.  —  All  provisions  in  contracts  existing  on  the  5th  day  of  April, 
which  are  contrary  to  the  interstate  commerce  law,  become  void  so  far  as 
they  are  executory. 

7.  Are[export  drawbacks  prohibited  by  law  ? 

Ans.— Export  drawbacks  are  not  prohibited,  provided  they  do  not 
in  other  respects  infringe  the  provisions  of  the  interstate  commerce  law. 

8.  Does  the  proportion  of  a  through  rate,  which  a  railroad  receives  under  a  joint 
tariff,  fix  the  local  charge  between  the  same  points  ? 


INTER -STATE    COMMERCE    LAW.  187 

Ans. — The  proportion  of  a  through  rate,  which  a  railroad  receives 
under  a  joint  tariff,  has  no  relation  to  or  connection  with  the  compensa- 
tion it  is  entitled  to  charge  for  transportation  on  its  own  line. 

q.     Can  tickets  to  scholars  be  sold  at  less  rates  than  to  other  children  of  the  same  age  ? 

Ans. — The  law  does  not  authorize  the  sale  of  tickets  to  scholars  at 
rates  lower  than  those  charged  to  other  children  of  the  same  age. 

10.     What  constitutes  an  excursion  ticket  under  the  law  ? 

Ans. — An  excursion  ticket  means  a  round  trip  ticket  sold  at  a  reduced 
rate  to  any  person  who,  for  a  special  purpose  or  at  a  particular  season, 
desired  to  make  a  special  journey  within  a  given  time  to  a  given  point 
and  return. 

ii.     Does   the  law  apply  to  the  express  business  as  a  matter  for  which  the  railroad 
companies  are  responsible  to  the  public  ? 

Ans.  —  Express  companies  are  common  carriers  and  subject  to  the 
provisions  of  this  act.  A  violation  of  its  provisions  by  the  express  com- 
panies does  not  render  the  railroad  company  responsible,  unless  the  latter 
has  knowingly  participated  therein. 

The  answers  to  the  above  questions  naturally  divide  themselves  into 
two  parts.  First,  What  could  or  could  not  be  done  under  the  law  ? 
Second,  What  uniform  principles  in  conducting  their  business  it  was  best 
for  all  railroads  at  the  present  time  to  adopt  ?  The  discussion  was  con- 
fined to  the  provisions  of  the  law  itself.  As  a  matter  of  policy  the  com- 
mittee would  recommend  that  railroad  companies,  in  conducting  their 
business,  should  not  confine  themselves  to  the  distinction  made  in  the 
law  between  state  and  interstate  commerce,  but  whatever  is  found  best 
or  expedient  to  do  in  regard  to  interstate  commerce,  should  also  be 
applied  to  commerce  confined  entirely  to  one  state,  and,  as  far  as  possible, 
the  practice,  under  the  same  conditions  and  circumstances,  should  be  the 
same  by  all  railroads. 

It  was  voted  that  the  recommendation  of  the  committee  in  relation  to 
question  1  be  adopted,  and  that  no  passes  be  issued  for  interstate  business 
except  those  authorized  by  the  law  as  explained  by  the  committee,  and 
that  all  outstanding  passes  in  violation  of  the  act  as  interpreted  by  the 
committee,  be  withdrawn.  After  discussion  it  was  also  voted  that  the 
whole  matter  of  complimentary  state  passes  be  left  to  the  wise  discretion 
of  each  railroad  to  decide  for  itself,  but  that,  in  the  opinion  of  this  con- 
vention, any  passes  given  for  the  purpose  of  influencing  commerce  would 
be  in  contravention  of  the  spirit  of  the  interstate  commerce  law.  It  was 
also  voted  to  adopt  the  committee's  report  in  relation  to  questions  5,  7,  8, 
9,  10  and  11. 

REPORT  OF   GENERAL  PASSENGER  AGENTS'   COMMITTEE. 

The  committee  of  passenger  agents,  to  whom  was  referred  the  second 
question,  in  regard  to  commissions  and  baggage,  submitted  the  following 
report: 

"  Commissions— Your  committee  have  carefully  considered  section 
7  in  the  proceedings  of  the  joint  committee  meeting  held  in  New  York, 


188  INTER -STATE    COMMERCE    LAW. 

March  4,  1887,  and  it  is  the  sense  of  this  committee  that,  while  the  act  of 
paying  commissions  is  not  a  violation  of  the  law,  hut  the  payment  of  a 
commission  may  result  in  a  violation,  therefore  we  unanimously  recom- 
mend that  the  payment  of  coin  missions  for  the  sale  of  passenger  tickets 
to  any  agent,  firm,  broker,  scalper  or  other  person  be  absolutely  abolished 
by  the  New  England  roads  after  March  31,  1887. 

"Baggage — The  subject  of  baggage  (section  6,  joint  committee) 
referred  to  this  committee  for  consideration  is  as  follows: 

' '  It  has  been  the  custom  of  railway  companies  to  transport  a  certain 
amount  of  personal  baggage,  in  baggage  cars  provided  for  this  purpose 
on  paasenger  trains,  for  which  no'separate  charge  has  heretofore  been 
made.  The  custom  has  varied  somewhat  in  different  sections  of  the 
country  and  for  different  classes  of  people.  To  the  end  that  a  uniform 
rate  may  be  adopted,  we  recommend  that  the  rule  for  free  transportation 
of  personal  baggage  be  as  follows,  and  that  no  greater  excess  be  allowed 
to  go  free,  or"  at  different  rates  than  are  named  in  this  general  rule: 
(a)  There  may  be  checked  free  on  each  full  first  or  second  class  ticket 
150  pounds  of  baggage;  on  each  half  first  or  second  class  ticket,  75 
pounds;  on  each  full  emigrant  ticket,  100  pounds,  (b)  Baggage  of  first 
and  second  class  passengers  weighing  in  excess  of  the  free  allowance  thus 
authorized  shall  be  subject  to  a  charge  of  not  less  than  12  per  cent,  of  the 
lowest  unlimited  first-class  fare;  provided,  however,  that  no  less  charge 
than  25  cents  be  made  in  any  case,  (c)  No  single  piece  of  baggage 
weighing  more  than  250  pounds  shall  be  checked  as  baggage  by  any  of 
these  lines  except  for  ship  immigrants.  We  recommend  lhat  this  con- 
cession shall  apply  only  to  the  personal  baggage  of  travelers,  as  covered 
and  included  in  decisions  at  common  law,  to-wit,  the  personal  effects  of 
the  traveler,  which  may  include  his  wearing  apparel,  worn  jewelry,  a 
book  for  reading  on  his  journey,  a  watch,  or  other  personal  effects  which 
are  not  merchandise,  and  which  may  vary  according  to  the  condition  in 
life  of  the  passenger  and  the  length  of  his  journey,  and  that  no  commer- 
cial luggage,  musical  instruments,  organs,  pianos,  donkeys,  horses  or 
theatrical  scenery  be  transported  as  free  baggage.  We  recommend  that 
all  excess  baggage,  order  books  and  permits  be  at  once  withdrawn  from 
sale. 

"  Your  committee  recommend  the  adoption  of  the  above  with  the 
following  exception:  That  commercial  travelers'  baggage  be  checked 
under  the  same  conditions  as  to  weight  as  that  of  other  passengers,  with 
the  exception  that  railroad  companies  shall  not  be  held  responsible  in  the 
event  of  loss  and  damage  except  for  personal  effects  as  enumerated  above. 
We  would  respectfully  suggest  that  for  the  sake  of  uniformity  in  the 
transaction  of  business  of  New  England  roads  that  the  above  recommen- 
dation relating  to  interstate  business  be  applied  to  local  state  traffic." 

It  was  voted  to  adopt  the  report  of  the  committee  in  relation  to  com- 
missions and  baggage,  and  also  that  for  the  sake  of  uniformity  the  above 
recommendation  relative  to  interstate  business  be  applied  to  local  state 
traffic. 

REPORT  OF  GENERAL  FREIGHT  AGENTS'  COMMITTEE. 

The  committee  of  general  freight  agents  to  whom  was  referred  the 
third,  fourth  and  sixth  questions  of  the  report  presented  the  following 
report: 


INTER -STATE    COMMERCE    LAW.  189 

41 3.  Shall  a  charge  be  made  for  detention  of  cars  where  the  duty  of  unloading  devolves 
upon  the  consignees  ? 

' '  It  is  the  sense  of  the  committee  that  a  reasonable  and  just  charge 
should  be  made  for  the  detention  of  cars  where  the  duty  of  unloading 
devolves  upon  the  consignees. 

M  4.    Shall  freight  charges  be  collected  at  once  on  delivery  of  goods  in  all  cases  ? 

"It  is  the  sense  of  the  committee  that  this  is  a  question  which  should 
not  be  decided  by  the  traffic  department  of  the  railroads,  but  should  be 
settled  by  the  president  and  board  of  directors  of  the  different  roads. 

11  Shall  freight  be  stopped  off  short  of  its  billed  destination,  or  changed  in  transit  from 
one  destination  to  the  other?  And  in  connection  with  this,  shall  grain  in  transit  be  stopped 
off  for  milling  and  a  mill   product  sent  forward  on  the  same  way  bill? 

' '  Three  members  of  the  committee  vote  that  freight  may  be  stopped 
off  short  of  its  billed  destination  or  changed  in  transit  from  one  destina- 
tion to  another,  subject  to  a  reasonable  charge  for  the  service,  and  two 
members  of  the  committee  vote  that  freight  may  be  stopped  off  short  of 
its  billed  destination,  or  changed  in  transit  from  one  destination  to 
another,  where  the  through  rate  and  the  divisions  of  the  through  rate  are 
identical.  The  committee's  answer  to  the  second  section  of  question  6  is 
that  it  is  the  sense  of  the  committee  that  grain  in  transit  should  not  be 
stopped  for  milling  and  a  mill  product  be  sent  forward  on  the  same  way- 
bill; but  the  committee  thinks  that  special  rates  may  be  made  for  carry- 
ing the  mill  products  from  the  mill  to  points  on  the  line  of  the  road 
which  brought  the  gram  to  the  mill." 

It  was  voted  to  adopt  the  recommendation  of  the  committee  in  regard 
to  the  third  and  fourth  questions  of  the  report,  and  it  was  voted,  after 
some  discussion  of  the  sixth  question  of  the  report,  that  "freight  in 
carloads  which  a  railroad  company  receives  from  connecting  roads  may 
be  stopped  off  short  of  its  billed  destination,  or  diverted  to  another  desti- 
nation on  the  line  of  that  road  upon  which  the  original  destination  is 
located;  always  provided  that  the  through  rate  and  the  divisions  thereof  to 
the  new  destination  are  identical  with  those  on  the  original  way-bill,  and 
provided  also  that  notice  of  the  desired  change  in  destination  be  given  by 
the  owner  to  the  agent  before  the  car  has  reached  the  road  upon  which 
the  change  in  destination  is  to  be  made." 

The  committee  to  whom  was  referred  the  question  of  a  uniform 
classification  of  local  freight  rates  reported  that  the  variations  in  New 
England  are  confined  to  special  articles,  such  as  lumber,  brick,  dry 
goods,  carriages,  etc. ,  and  that  if  time  was  given,  and  a  full  meeting  with 
New  England  roads  be  had,  the  matter  could  be  satisfactorily  adjusted. 
The  committee  was  also  of  the  opinion  that  the  adoption  of  rates  fixed 
by  the  trunk  lines  for  local  business  would,  if  applied  in  New  England, 
result  in  a  serious  loss  of  revenue. 

Upon  this  report  it  was  voted  that  it  is  desirable  for  the  New  Eng- 


190  INTER -STATE    COMMERCE    LAW. 

land  roads  to  adopt  a  uniform  classification  for  their  local  and  inter- 
changeable freight  business,  and  that  the  subject  of  a  uniform  classifica- 
tion for  local  and  interchangeable  business  of  New  England  roads  be 
referred  to  a  committee  consisting  of  one  representative  for  each  road 
here  represented,  with  power  to  act.  A  committee  was  appointed  in 
accordance  with  the  vote. 

And  the  meeting  adjourned  sine  die. 


APPLICATION  FOR  RELIEF  FROM  SECTION  FOUR. 


ARGUMENT     OF    MR.    MILTON   H.   SMITH,    ON  BEIIALF  OF   THE    SOUTHERN 
RAILWAY  AND   STEAMSHIP  ASSOCIATION,  SUBMITTED   TO   THE 
INTER-STATE     COMMERCE     COMMISSION    AT    WASH- 
INGTON, april  2,  1887. 


Mr.  Chairman  and  Gentlemen  of  the  Commission: 

We  appear  before  you  as  a  committee  representing  the  Southern 
Railway  and  Steamship  Association. 

The  Southern  Railway  and  Steamship  Association  is  one  of  a  num- 
ber of  similar  organizations  existing  throughout  the  country,  that  owe 
their  origin  to  the  rapid  development  of  the  transportation  systems  and 
methods  that  has  taken  place  in  this  country  during  the  past  twenty 
years. 

For  nearly  thirty  years  from  the  beginning  of  the  construction  of 
railroads  in  the  United  States,  little  or  no  attempt  was  made  at  federa- 
tion. Nearly  all  the  railroads  constructed  during  that  period  were  local; 
and  even  where  two  or  more  companies  constructed  railroads  that  con- 
nected, and  together  formed  a  continuous  line,  they  continued  to  be  op- 
erated as  local  railroads,  each  company  issuing  bills  of  lading  to  points 
on  its  own  line  at  local  rates  only,  both  freight  and  passengers  being 
transferred  at  termini. 

For  many  years  forwarding  and  commission  merchants  continued  to 
transact  business  in  the  same  manner  as  when  the  transportation  of  the 
country  was  by  water — that  is,  a  shipment  from  an  interior  point  in 
Ohio,  say  Springfield,  destined  to  a  point  south,  say  Bowling  Green, 
Ky. ,  was  shipped  locally  to  Cincinnati,  consigned  to  a  forwarding  and 
commission  merchant,  who  received  the  same,  paid  the  freight,  trans- 
ferred the  shipment  through  the  city,  and  delivered  it  to  the  Mail  line 
boats  plying  between  Cincinnati  and  Louisville,  shipped  it  to  another  for- 
warding and  commission  merchant  at  Louisville,  who  in  turn  receipted 
for  the  property,  paid  charges  accruing  thereon  up  to  that  point,  attended 
to  the  transfer  to  the  depot  of  the  Louisville  and  Nashville  Railroad 
Company,  and  shipped  the  property  to  destination,  collecting  from  the 
railroad  company  as  advances  the  accrued  charges,  including  a  liberal 
compensation  for  receiving  and  forwarding,  with  a  fair  margin  of  profit 
in  the  item  of  drayage. 

These  conditions  resulted  in  the  formation  of  fast-freight  line  organ- 
izations by  enterprising  persons  who  saw  the  necessity  for  through  ar- 
rangements, whereby  shippers  could  forward  property  to  distant  points 
over  the  lines  of  a  number  of  carriers  under  a  contract  for  a  through 
rate  and  continuous  carriage.    These    fast-freight    lines    entered    into 

191 


192  INTER  -  STATE  ^COMMERCE    LAW. 

agreements  with  the  different  carriers,  whereby,  in  consideration  of  as- 
suming the  responsibilities  of  through  contracts,  through  carriage,  and 
furnishing  through  cars,  they  secured  reduced  rates  of  transportation  on 
car-load  quantities,  occupying  the  position  of  middle  men  between  the 
various  carriers  and  the  shippers.  As  this  system  developed,  and  the 
rates  of  transportation  declined,  the  profits  of  the  fast-freight  lines  were 
found  to  be  excessive ;  and  as  it  became  apparent  that  the  carriers  could 
by  combination  furnish  facilities  nearly  or  quite  equal  to  those  of  the 
fast  freight  lines,  complaint  arose  that  such  organizations  were  an  un- 
necessary tax  upon  the  revenue  of  the  carriers.  No  such  organization 
lias  ever  existed  in  the  territory  served  by  the  carriers — members  of  the 
Southern  Railway  and  Steamship  Association. 

In  time  it  became  apparent  that  the  carriers  could  eliminate  some  of 
the  charges  imposed  upon  traffic  under  the  methods  just  described  by 
agreeing  to  become  parties  to  through  arrangements,  and,  by  one  carrier 
receiving  the  property  from  the  shipper  and  consigning  it  directly  to  a 
connecting  carrier  to  be  carried  to  destination,  or  to  be  delivered  to  an- 
other connecting  carrier,  could  perform  the  service  theretofore  per- 
formed by  the  forwarding  and  commission  merchant  or  by  the  fast- 
freight  lines.  This  could  be  done  with  little  or  no  increased  "expense  to 
the  carrier,  since  the  same  facilities  that  were  necessary  for  the  carrier  to 
clo  business  with  the  forwarding  and  commission  merchants  could  be 
used  in  receiving  property  from  and  delivering  it  to  connecting  carriers. 
Even  after  these  methods  were  to  some  extent  adopted,  carriers  in  many 
instances,  while  guaranteeing  through  rates  which  were  the  sums  of  the 
locals,  only  receipted  for  property  to  the  ends  of  their  railroads,  and 
still  continued  to  transfer  property  from  car  to  car,  or  by  drays  at  termini, 
each  company  receiving  its  local  rates. 

This,  for  a  time,  created  a  class  of  middlemen,  which  may  be  cor- 
rectly described  as  "  freight  brokers."  They  were  generally  enterprising 
men,  who  familiarized  themselves  with  the  rates  of  the  various  carriers; 
and  by  manipulating  them  were  able  to  contract  with  shippers  at  lower 
rates  than  the  shippers,  without  the  special  knowledge  of  rates,  could 
secure  for  themselves.  Ify  reshipping  at  less  rates  they  secured  a  margin 
that  would  remunerate  them  for  their  time  and  enterprise.  As  an  illus- 
tration, a  person  such  as  we  have  described,  located  at  Cincinnati,  would 
contract  with  manufacturers  in  the  interior  of  Ohio,  guaranteeing  a 
through  rate  from  the  manufactory  to  destination;  have  the  property 
consigned  to  him  at  Cincinnati,  pay  charges,  reship  at  rates  he  had 
secured,  and  collect  from  the  carrier  the  difference  between  rates  thus 
secured  and  the  contract  rate  made  between  himself  and  the  manufac- 
turer. As  the  methods  of  the  carrier  rapidly  improved,  this  class  of 
middle-men  soon  became  exthict. 

As  two  or  more  carriers  entered  into  arrangements  for  continuous 
carriage  over  their  various  railroads,  the  joint  business  rendered  fre- 
quent communication  and  personal  conferences  necessary.  This  devel- 
oped traffic  agents,  who  devoted  much  or  most  of  their  time  to  what 
became  known  as  "  through  traffic,"  in  contradistinction  to  "  local  traf- 
fic," or  traffic  between  stations  on  the  line  of  a  single  carrier.  As  the 
system  gradually  extended,  and  the  number  of  carriers,  parties  to 
through  arrangements  increased,  the  necessity  of  some  organization  for 


INTER -STATE    COMMERCE    LAW.  193 

tlie  transaction  of  the  joint  business  was  developed,  and  this  resulted  in 
the  formation  of  associations. 

The  Southern  Railway  and  Steamship  Association  may  be  said  to 
have  come  into  existence  in  1875,  although  it  was  the  successor  <>!'  sim- 
ilar organizations  less  comprehensive.  The  objects  of  the  Association 
are  partially  set  forth  by  the  following  extract  from  the  preamble  of  the 
agreement  submitted  herewith: 

"That  whereas,  The  establishment  and  maintenance  of  tariffs  of  uniform  rates  and 
the  prevention  of  unjust  discrimination,  such  as  necessarily  arises  from  the  irregular  and 
fluctuating  rates  which  inevitably  attend  the  separate  and  independent  action  of  trans- 
portation lines,  is  important  for  the  protection  of  the  public;  and 

"Whereas,  It  is  deemed  to  be  to  the  mutual  advantage  of  the  public  and  the  trans- 
portation companies  that  business  in  which  they  have  a  common  interest  should  be  so 
conducted  as  to  secure  a  proper  correlation  of  rates  such  as  will  protect  the  interest  of 
competing  markets  without  unjust  discriminations  in  favor  of  or  against  any  city  or  sec- 
tion ;  and 

"Whereas,  These  objects  can  be  attained  only  by  co-operation  on  the  part  of  the 
various  transportation  lines  engaged  in  the  traffic  of  the  territory  south  of  the  Potomac 
and  Ohio  rivers  and  east  of  the  Mississippi  river  ;  and 

•'Whereas,  Such  co-operation  is  absolutely  necessary  to  a  strict  compliance  with  the 
requirements  of  the  act  of  Congress,  entitled  'An  Act  to  Regulate  Commerce.' 

"Now,  therefore,  in  order  to  secure  such  co-operation  among  the  said  transportation 
"lines,  by  providing  means  for  the  prompt  adjustment  of  the  differences  which  may  arise 
betvv«en  them  ;  by  placing  all  of  their  traffic  common  to  two  or  more  companies,  under 
the  control  of  officers  jointly  elected,  and  by  the  general  conduct  of  the  same  under  well- 
defined  rules  and  regulations  which  will  insure  the  maintenance  of  rates,  it  is 
mutually  agreed,"  etc. 

It  will  be  seen  that  the  agreement  submitted  herewith  is  to  take 
effect  on  the  1st  of  April.  It  is,  however,  simply  a  modification  of  an 
agreement  which  has  been  in  effect  for  several  years,  the  principal 
change  being  the  elimination  of  such  portions  as  provided  for  the  allot- 
ment or  division  of  traffic  which  is  specifically  prohibited  in  section  5  of 
'  'An  Act  to  Regulate  Commerce. " 

Most  of  the  common  carriers  in  the  territory  south  of  the  Potomac 
and  Ohio  and  east  of  the  Mississippi  rivers  are  parties  to  the  agreement, 
the  most  important  exception  being  the  Chesapeake  and  Ohio  Railway 
Company,  which,  though  located  south  of  the  Ohio  and  Potomac  rivers, 
takes  traffic  in  competition  with  the  trunk  lines  and  their  connections. 
The  terms  and  conditions  upon  which  it  interchanges  traffic  with  mem- 
bers of  the  Southern  Railway  and  Steamship  Association  are  similar  to 
those  upon  which  the  trunk  lines  and  their  connections  interchange 
traffic  with  them. 

From  the  foregoing  it  will  be  seen  that  we  represent  the  carriers 
that  furnish  transportation  facilities  for  a  large  part  of  the  State  of  Vir- 
ginia, practically  all  of  Xorth  Carolina,  South  Carolina,  Georgia,  Ala- 
bama, and  Tennessee,  and  a  part  of  Kentucky,  Mississippi.  Louisiana. 
and  Florida,  and  the  traffic  interchanged  between  those  States  and  other 
parts  of  the  country. 

The  results  obtained  by  the  Southern  Railway  and  Steamship  Asso- 
ciation, like  those  of  most  other  similar  associations,  are  mainly  the 
simplification  of  negotiations  between  the  numerous  parties  to  the  ar- 
rangements for  interchanging  traffic.  As  will  be  seen  by  reading  the 
agreement,  the  parties  thereto  delegate  but  little  authority  to  the  Associa- 
tion, and  where  this  is  done  it  is  of  small  moment  in  practice,  for  the 
reason  that  such  voluntary  agreements,  like  those  of  nearly  all  similar 


194  INTER -STATE    COMMERCE    LAW. 

commercial  organizations,  can  not  be  legally  enforced,  and  are  complied 
with  only  in  so  far  as  the  representatives  of  the  various  corporations 
deem  that  the  interests  they  represent  will  be  promoted  thereby,  or  as 
their  personal  whims  or  inclinations  may  dictate.  These  associations  are 
of  like  nature  with  the  various  trade  organizations,  such  as  boards  of 
trade,  chambers  of  commerce,  manufacturers  associations,  and  so  on. 

An  examination  of  a  map  of  the  United  States  shows  that  the  traffic 
conditions  of  the  territory  served  by  the  carriers  here  represented  differ 
materially  from  those  of  the  large  r  portion  of  the  remainder  of  the 
United  States.  Commencing  at  Cumberland,  Md.,  thence  down  the 
Potomac  and  Chesapeake  to  the  Atlantic,  thence  following  the  coast  to 
New  Orleans,  and  the  Mississippi  and  Ohio  rivers  to  Pittsburgh,  Pa.,  the 
entire  territory  is  practically  surrounded  by  navigable  waters.  In  addi- 
tion to  being  thus  surrounded  the  territory  is  penetrated  by  navigable 
rivers  emptying  into  the  ocean  and  the  gulf,  and  by  the  various  tributar- 
ies of  the  Ohio  and  the  Mississippi.  There  are  numerous  points  that  are 
competitive  between  rail  and  water  carriers  along  and  near  the  Atlantic 
coast.  The  James  River  is  navigable  to  Richmond,  Va.  Boats  ply  the 
Savannah  river  with  more  or  less  regularity  as  far  inward  as  Augusta, 
Ga.  They  ply  the  Chattahooche  as  far  as  Columbus,  Ga.  The  Alabama 
and  its  tributaries  are  navigable  from  Mobile  to  Montgomery,  Ala.,  and 
to  Aberdeen,  Miss.  The  Tennessee  is  navigable  from  Padiicah,  Ky.,  to 
Florence,  Ala.,  and  from  Decatur,  Ala.,  to  Chattanooga,  Tenn.,  and 
during  certain  seasons  of  the  year  above  Chattanooga  as  far  as  Knox- 
ville.  The  Government  has  for  years  been  engaged  in  constructing  a 
canal  around  Muscle  Shoals.  The  work  is  nearly  completed,  and  the 
Tennessee  will  soon  be  navigable  between  Paducah  and  Chattanooga. 
The  Cumberland  is  navigable  for  a  large  portion  of  the  year  between 
Smithland,  Ky.,  and  Somerset,  Ky.,  the  crossing  of  the  Cincinnati 
Southern  railroad.  Thd  Green  and  Barren  rivers  are  navigable  between 
Evansville  and  Bowling  Green.  The  Kentucky  river  is  navigable  be- 
tween Carrollton,  at  its  mouth,  and  Oregon,  Ky.  There  are  a  number 
of  smaller  streams  which  are  navigable  for  small  craft  during  a  portion 
of  the  year. 

For  many  years  the  Government  has  been  spending  large  sums  of 
money  to  improve  the  navigability  of  these  streams  by  building  locks 
and  dams,  wing-dams,  deepening  channels,  and  erecting  and  maintaining 
lights  and  signals,  thus  cheapening  the  cost,  lessening  the  risk,  and  other- 
wise increasing  the  facilities  for  navigating  all  the  inland  waters  of  this 
territory.  Nearly  or  quite  all  of  the  carriers  navigating  these  streams 
are  engaged  to  a  greater  or  less  extent  in  interstate  commerce. 

The  more  important  cities  of  this  territory,  such  as  Cincinnati, 
Ohio;  Louisville,  Ky.;  St.  Louis,  Mo.;  Nashville,  Tenn.;  Memphis, 
Tenn.;  Montgomery,  Ala.;  Selma,  Alma;  Mobile,  Ala.;  New  Orleans, 
La,;  Pensacola,  Fla.;  Savannah,  Ga;  Charleston,  S.  C;  Augusta,  Ga. ; 
Wilmington,  N.  C. ;  Richmond,  Va.;  Vicksburgh,  Miss.,  were  commer- 
cial centers,  where  traffic  with  the  surrounding  country  was  inter- 
changed, before  railroads  were  built  to  them.  They  became  commercial 
centers  by  virtue  of  natural  location  and  of  the  facilities  they  enjoyed, 
and  do  still  enjoy,  from  water  transportation.  When  the  railroads 
reached  these  points  they  found  the  circumstances  and  conditions,  by 


INTER -STATE    COMMERCE    LAW.  195 

reason  of  meeting  with  water  competition,  entirely  dissimilar,  the  vol- 
ume of  traffic  concentrating  at  such  points  being  many  times  greater 
than  at  intermediate  stations,  and  the  value  of  the  transportation  to  the 
shipper  already  fixed  by  the  water  carriers. 

As  would'be  expected,  the  attempt  to  construct  railroads  through- 
out this  territory  started  from  points  on  existing  water-transportation 
lines.  Among  the  first  to  be  built  was  the  South  Carolina  railroad, 
Charleston  to  Augusta;  soon  after  the  road  from  Vicksburgh  to  Jack- 
son, Miss.;  then  from  Savannah  to  Macon;  Augusta  to  Atlanta;  Atlanta 
to  Chattanooga;  Memphis  to  Chattanooga;  Chattanooga  to  Nashville; 
Louisville  to  Nashville;  Memphis  in  the  direction  of  Louisville;  New 
Orleans  to  Jackson,  Miss.;  Atlanta  to  West  Point;  West  Point  to  Mont- 
gomery; Montgomery  in  the  direction  of  Pensacola;  Pensacola  in  the 
direction  of  Montgomery;  Mobile  northward;  Dal  ton  to  Knoxville; 
Norfolk  in  the  direction  of  Lynchburg,  etc.  As  the  railroads  were  con- 
structed from  water  lines  towards  the  interior,  tariffs  for  the  transporta- 
tion of  property  were,  at  first,  based  mainly  upon  the  distance.  By  this 
is  not  meant  that  in  any  case  was  the  same  rate  per  ton  per  mile  basis 
adopted  for  the  transportation  of  property  for  different  distances,  but 
that,  as  the  distance  increased,  the  rates  were  gradually  increased.  The 
long  and  short  haul  problem,  which  has  for  some  years  past  vexed  legis- 
lators and  taxed  the  ingenuity  of  traffic  managers,  had  not  then  arisen. 
In  those  days  it  was  not  supposed  that  railroads  could,  under  any  cir- 
cumstances, compete  with  water  transportation.  Less  than  thirty  years 
ago,  some  time  after  the  completion  of  the  several  railroads  which  to- 
gether form  a  continuous  rail  line  from  Nashville,  Tenn.,  to  Savannah, 
Ga.,  an  enterprising  young  man,  then  and  now  a  citizen  of  Tennessee, 
with  a  slight  practical  experience  in  river  transportation,  went  to  Sav- 
annah and  presented  to  the  president  of  the  great  Central  Railroad  of 
Georgia — a  road  190  miles  long — a  plan  to  secure  the  transportation  of 
wheat  from  Tennessee  to  New  York  via  Savannah.  The  great  magnate, 
while  good-naturedly  assenting  to  the  proposed  arrangement,  bluntly 
said  that  he  never  expected  to  see  or  hear  of  him  or  the  wheat  again. 
He  and  the  chief  officers  of  the  other  railroads  and  the  steamship  lines 
over  which  the  property  was  carried  were  greatly  surprised  when  the 
effort  resulted  in  what  was  then  deemed  a  large  movement  of  the  pro- 
duct of  Tennessee. 

It  was  also  about  this  time  that  the  superintendent  of  the  Western 
and  Atlantic  road,  a  road  constructed,  owned,  and  operated  by  the  State 
of  Georgia,  in  his  annual  report  to  the  Governor,  referred  to  the  fact 
that  during  the  preceding  year,  when  there  had  been  almost  a  total 
failure  of  the  corn  crop  throughout  the  State,  a  large  quantity  of  corn 
had  been  transported  from  Tennessee,  and  had  thus  been  the  means^  of 
preventing  much  suffering  and  loss  to  the  citizens  of  Georgia;  offering 
this  as  a  remarkable  fact  to  prove  the  wisdom  of  the  State  in  investing  a 
large  sum  of  money  in  what  had  before  that  proved  to  be  an  unprofit- 
able enterprise. 

The  construction  of  railroads  to  interior  points  has  greatly  facili- 
tated interchange  of  commodities  between  different  sections  of  the 
country,  and  has  added  to  the  comfort  and  luxury  of  the  people.  Be- 
fore the  construction  of  railroads,  communities  located  in  the  interior 


196  INTER -STATE    COMMERCE    LAW. 

produced  but  comparatively  few  articles  that  would  bear  the  excessive 
cost  of  transportation  by  the  facilities  then  in  use.  Such  articles  as  wool 
and  feathers,  of  which  the  relative  value  as  compared  with  weight  is 
great,  would  bear  transportation  for  quite  long  distances  to  the  nearest 
point  favored  with  water  transportation.  Corn  and  such  like  articles 
could  only  be  disposed  of  for  consumption  in  the  neighborhood,  or  be 
converted  into  a  product  that  would  increase  its  value  as  compared  with 
its  bulk  and  weight,  such  as  whiskey,  live  stock,  etc.  The  quantity  of 
merchandise  used  in  such  communities  was  also  greatly  restricted  by 
the  cost  of  transportation.  The  result  was  that  these  communities  lived 
mainly  within  themselves — that  is,  they  produced  much  of  what  they 
consumed  and  consumed  most  of  what  they  produced. 

When  railroad  companies  began  to  extend  their  lines  into  the  inte- 
rior, their  rates  of  transportation  were  adjusted  within  their  charter 
limits  to  meet  the  existing  condition  of  things.  For  the  first  few  miles 
they  were  unable  to  compete  with  the  transportation  by  animal  power. 
But  as  lines  were  extended  the  limits  prescribed  by  charters  produced 
rates  that  were  less  than  the  cost  of  animal  trrnsportation.  And  as  lines 
were  still  farther  extended  it  became  evident  that  the  maximum  charter 
rates,  if  insisted  upon,  would  prohibit  the  transportation  of  some  art- 
icles. In  other  words,  rates  so  fixed  were  more  than  the  traffic  would 
bear.  If  the  rate  on  corn  was  made  as  great  as  the  rate  on  wheat,  the 
corn  could  not  be  shipped,  and  was  therefore  converted  by  feeding  to 
stock  or  by  manufacturing  whiskey.  The  natural  consequence  was  that 
to  encourage  the  shipment  of  corn  the  rate  was  reduced.  In  the  same 
way  the  limit  of  the  rate  for  the  transportation  of  wheat  was  reached. 
So  in  the  case  of  other  articles  of  which  the  value  as  compared  with  the 
bulk  and  weight  is  relatively  small.  Thus  railroad  managers  learned 
their  first  lesson  in  promoting  traffic.  Many  articles,  the  value  of  which 
as  compared  with  the  bulk  is  relatively  great,  such  as  dry  goods,  boots 
and  shoes,  drugs,  etc.,  have  seldom  or  never  been  charged  what- such 
traffic  will  bear. 

From  the  limitations  herein  described,  managers  of  railroads  first 
discovered  the  fact  which  involves  a  paradox — that  traffic  can  be  trans- 
ported and  yield  a  profit  at  a  rate  that  is  less  than  the  average  cost:  that 
additional  traffic  secured  at  a  rate  that  yields  revenue  in  excess  of  the 
additional  cost  of  carriage,  though  less  than  the  average  cost,  produces  a 
profit. 

I  have  said  that  managers  learned  this,  and  it  is  true,  so  far  as 
adopting  in  practice  rates  so  based;  although,  with  a  few  exceptions,  it 
is  too  much  to  say  that  they  clearly  comprehended  the  fact.  Many  of 
them  still  do  not  so  clearly  comprehend  it  as  to  enable  them  to  make  an 
intelligent  explanation  of  it.  Only  when  rail  lines  undertook  to  com- 
pete with  water  lines  was  this  important  economic  fact  extensivety  put  in 
practice. 

As  the  railroads  starting  from  opposite  points  on  the  water-bound 
territory  were  extended  into  the  interior,  the  adoption  of  rates  of  trans- 
portation that  were  not  less  for  the  longer  than  for  the  shorter  distance 
resulted  in  an  increase  in  the  rates  of  transportation.  One  line  starting 
from  Charleston  and  extending  in  the  direction  of  Memphis,  and  another 
starting  from  Memphis  and  extending  via  Chattanooga  in  the  direction 


INTER -STATE    COMMERCE    LAW.  197 

of  Charleston,  the  maximum  rates  from  the  basing  points,  Charleston 
and  Memphis,  were  reached  at  the  meeting  point,  say  somewhere  in  the 
State  of  Georgia.  This  basis  of  adjusting  rates  was  and  is  still  beyond 
criticism  so  long  as  the  principle  obtains  that  the  rate  for  the  longer  dis- 
tance shall  not,  under  any  circumstances,  be  less  than  for  the  shorter 
distance,  and  it  was  acquiesced  in  by  all  concerned  until  the  various  rail- 
roads entered  into  the  arrangements  heretofore  referred  to,  whereby  they 
undertook  to  contract  for  continuous  carriage  between  distant  points, 
over  a  number  of  railroads,  at  a  specific  rate,  and  to  compete  with  water 
carriers. 

When  railroads  undertook  to  transport  property  from  Charleston  to 
Memphis,  it  was  found  that  it  could  be  done  only  under  limitations  not 
theretofore  encountered  ;  that  the  compensation  for  transporting  prop- 
erty was  limited  to  its  value  to  the  owner,  and  that  the  value  was  not  in 
this  case  what  the  traffic  could  bear,  but  what  competing  carriers  would 
transport  it  for. ' 

_  Evidently,  at  this  stage,  the  net  revenue  derived  from  the  transpor- 
tation of  property  to  and  from  intermediate  points,  was  many  times, 
greater  than  could  possibly  be  obtained  for  the  transportation  of  like 
property  between  Charleston  and  Memphis.  Therefore,  the  interests  of 
the  carrier  demanded  that  the  transportation  of  property  between 
Charleston  and  Memphis  be  not  undertaken,  or  that  a  less  rate  for  the 
longer  than  for  the  shorter  distance  should  be  accepted.  This  principle 
also  had  to  be  applied  to  a  certain  extent  to  a  limited  number  of  inter- 
mediate points.  The  maximum  rate  that  could  be  secured  for  the  trans- 
portation of  property  from  Charleston  to  intermediate  local  stations  near 
Memphis  was  limited  to  the  value  of  transportation  from  Charleston  to 
Memphis  plus  the  rate  from  Memphis  to  those  stations,  which,  on  many 
classes  of  freight,  would  be  less  than  to  stations  a  greater  distance  from 
Memphis.  From  such  conditions  was  evolved  the  basis  upon  which 
rates  for  the  transportation  of  property  in  the  territory  represented  are, 
with  few  exceptions,  now  fixed. 

For  the  Louisville  and  Nashville  Railroad  Company  I  claim  that  the 
present  rates  for  the  transportation  of  property  are  not  only  just  and 
reasonable,  but  are  adjusted,  with  possible  exceptions,  in  accordance 
with  the  requirements  of  the  "Act  to  Regulate  Commerce." 

I  believe  that  the  "Act  to  Regulate  Commerce,"  in  prohibiting  car- 
riers from  charging  or  receiving  "any  greater  compensation,  in  the  ag- 
gregate, for  the  transportation  of  passengers,  or  of  like  kind  of  prop- 
erty, under  substantially  similar  circumstances  and  conditions,  for  a 
shorter  than  for  a  longer  distance,"  authorizes  carriers  to  charge  or  re- 
ceive greater  compensation  for  the  transportation  of  passengers  or  of 
like  kind  of  property  for  a  shorter  than  for  a  longer  dis- 
tance, under  circumstances  and  conditions  that  are  sub- 
stantially dissimilar,  and  that  your  Commission  can  only  au- 
thorize carriers  to  charge  less  for  longer  than  for  shorter  distances,  for 
the  transportation  of  passengers  or  of  like  kind  of  property  upon  appli- 
cation of  carriers  who  may  desire  so  to  do,  where  the  circumstances  and 
conditions  are  substantially  similar. 

Other  representatives  of  large  corporations  who  are  associated  with 
me  in  this  committee  hold  similar  viewt.  Our  views  are  more  clearly 
stated  by  Mr.  Albert  Fink,  from  whom  I  take  the  liberty  to  quote: 


198  INTER -STATE    COMMERCE    LAW. 

[Mr.  Smith  then  proceeds  to  quote  from  the  article  of  Mr.  Fink,  which  is  given  in 
full  in  this  volume,  commencing  at  page  r43,  giving  Mr.  Fink's  construction  of  section  4 
of  the  law.— Editors.] 

Personally  I  am  confident  that  the  foregoing  is  the  correct  interpre- 
tation of  the  fourth  section  of  the  act,  and  that  it  will  be  finally  so  de- 
cided. 

It  is  not  necessary  for  rne  to  call  your  attention  to  the  fact  that  if 
your  Commission  should  so  construe  the  law  it  would  not  only  give  in- 
stant relief  to  the  commerce  of  the  country,  which,  owing  to  the  unwise, 
unjustifiable,  and,  under  the  circumstances,  indefensible  construction  of 
section  four  of  the  act  by  the  managers  of  a  large  proportion  of  the  rail- 
roads throughout  the  country,  is  practically  suspended;  but  you  would 
relieve  yourselves  of  innumerable  complications  and  of  great  responsibil- 
ities that,  in  my  opinion,  you  are  not  called  upon  to  assume.  Under  the 
"Act  to  Regulate  Commerce,"  as  representing  common  carriers,  we  are 
not  authorized  to  bring  any  matter  to  the  attention  of  your  Commission 
except  to  ask  authority  to  charge  less  for  the  longer  than  for  the  shorter 
distance  for  the  transportation  of  property  under  substantially  similar 
circumstances  and  conditions.  We  are,  therefore,  debarred  from  apply- 
ing to  you  for  your  construction  of  the  fourth  section  of  the  act,  and 
possibly  we  are  not  justified  under  the  circumstances  in  bringing  the 
matter  to  your  attention. 

Others,  also  representing  large  corporations,  hold  opposite  views, 
construing  the  act  to  absolutely  prohibit  "any  common  carrier  subject  to 
the  provisions  of  this  act  to  charge  or  receive  any  greater  compensation 
in  the  aggregate  for  the  transportation  of  property  *  *  *  for 
a  shorter  than  for  a  longer  distance  over  the  same  line,  in  the  same  direc- 
tion, the  shorter  being  included  within  the  longer  distance,"  under  any 
and  all  conditions,  unless  specially  authorized  by  your  Commission. 

While  I,  as  representing  the  Louisville  and  Nashville  Railroad  Com- 
pany, firmly  believe  that  the  act  does  not  require  the  abandonment  of 
the  present  basis  of  adjusting  rates  for  the  transportation  of  property 
throughout  the  territory  now  under  consideration,  which  has  been  in 
effect  for  years,  and  upon  which  the  business  in  this  territory  and  with 
other  parts  of  the  country  is  based,  and  which  maybe  said  to  have  given 
general  satisfaction,  and  which  has  constantly  furnished  increased  facili- 
ties at  a  constantly  decreasing  cost  to  the  various  communities,  yet  I  am 
practically  forced,  by  what  I  deem  the  unwise  and  unwarranted  action  of 
connecting  carriers,  to  adopt  the  same  course  as  those  holding  opposite 
views. 

I  have  been  connected  with  Southern  railroads  since  1860.  For 
twenty  years  I  have  been  engaged  in  formulating  the  system  whereby 
through  rates  for  the  transportation  of  property  were  made  between 
points  on  the  Louisville  and  Nashville  railroad  and  all  parts  of  the 
country.  It  has  been  a  source  of  pride  with  me  that  shippers  of  nearly 
all  classes  of  property  could  secure  through  bills  of  lading  between  any 
point  on  the  Louisville  and  Nashville  railroad  and  nearly  every  point  in 
the  United  States,  and  on  some  classes  of  freight  to  some  points  in  Eu- 
rope. Many  years  ago,  after  much  labor,  I  succeeded  in  securing  data 
that  enabled  the  Louisville  and  Nashville  Railroad  Company  to  guarantee 
the  rates  on  cotton  from  all  points  on  or  reached  via  its  lines  to  nearly 


INTER- STATE    COMMERCE    LAW.  199 

every  cotton  mill  in  New  York,  New  England  and  Canada.  Even- 
transportation  line  in  the  Southern  territory  has  for  years  past  been  guar- 
anteeing rates  in  the  same  way. 

This  is  a  business  matter  and  does  not  call  for  any  exhibition  of  feel- 
ing, yet  I  confess  to  a  feeling  of  discouragement  and  annoyance  when  I 
see  the  labor  of  years  thrust  aside,  as  it  has  been,  by  connecting  carriers 
withdrawing  all  rates  for  the  interchange  of  traffic.  I  contend  that  con- 
necting carriers  were  not  justified  in  taking  such  action. 

We  are  aware  that  the  trunk  lines  and  most  of  their  Western  connec- 
tions have  prepared  and  put  in  effect  an  adjustment  of  rates  from  the 
first  of  April,  based  on  not  charging  less  for  the  longer  than  for  the 
shorter  distance.  Managers  of  railroads  are  human,  and  in  this  instance 
they  have  been  prompted  to  take  uniform  action  from  different  motives. 
Many  of  them  believe  that  a  strict  construction  of  the  law  in  this  re- 
gard will  on  the  whole  promote  the  interests  they  represent.  Others  are 
in  fear  of  a  multiplicily  of  lawsuits  with  corresponding  penalties.  Oth- 
ers are  compelled  to  do  so  by  the  action  of  competing  lines.  Others, 
comparatively  few  it  is  to  be  hoped,  believe  such  a  construction  will  seri- 
ously cripple  competing  lines  without  greatly  injuring  the  interests  they 
represent.  This  is  an  uncharitable  view,  but  there  is  evidence  going  to 
show  that  long  and  continued  strife  for  traffic  engenders  a  feeling  of 
animosity  in  some  characters  that  causes  the  individual  to  lose  sight  of 
nearly  every  thing  except  that  that  will  injure  a  rival  corporation. 

However,  the  competitive  conditions  north  of  the  Ohio  and  Potomac 
rivers  are  wholly  different  from  those  in  the  territory  represented  by  your 
petitioners. 

The  practice  of  adjusting  rates  so  as  to  not  charge  more  for  the 
longer  than  for  the  shorter  distance  has  been  in  effect  upon  the  trunk 
lines  for  many  years.  The  New  York  Central  Railroad,  paralleling  the 
Hudson  River,  the  Erie  Canal,  and  with  its  connections  west  of  Buffalo 
the  lakes,  has  water  competition  the  whole  length  of  its  line.  Evidently 
these  carriers  could  not  well  exact  a  higher  rate  for  the  shorter  than  for 
the  longer  distance,  because  the  competitive  circumstances  and  conditions 
are  substantially  similar  at  most  if  not  all  the  points  on  the  entire  line. 
A  higher  rate  from  Toledo,  or  from  Sandusky,  or  from  Cleveland,  to  the 
sea-board,  than  from  Chicago  to  the  sea-board,  could  not  well  be 
charged,  as  the  value  of  the  transportation,  or  the  charge  by  the  water 
lines,  is  not  greater  for  the  shorter  than  for  the  longer  distance.  The 
Pennsylvania  Railroad  Company  adopted  this  basis  at  least  twenty-five 
years  ago,  and  its .  action  forced  competing  lines  to  the  same 
course.  Therefore,  revising  the  rates  of  these  lines  to  adjust  them  in 
accordance  with  the  prohibition  against  charging  more  for  the  shorter 
than  for  the  longer  distance  involves  little  or  no  change,  so  far  as  their 
lines  and  immediate  connections  are  concerned.  It  will  be  readily  seen 
that  a  corporation  like  the  Pennsylvania  Railroad  Company,  operating 
nearly  five  thousand  miles  of  railroad  in  the  State  of  Pennsylvania,  the 
distance  from  the  nearest  sea-board  point  to  the  extreme  western  limit  of 
the  State  being  not  less  than  350  miles,  and  over  which  nearly  all  traffic 
from  the  West  must  pass,  can  with  its  immense  traffic  afford  to  adopt  a 
basis  that  secures  to  it  the  long  haul  upon  nearly  all  competitive  traffic. 
But  when  small  independent  companies  with  short  roads  and  light  traf- 


200  INTER -STATE    COMMERCE    LAW. 

fie  are  foreed  to  adopt  the  same  basis,  the  result  must  necessarily  be  dis- 
astrous. 

A  retrospective  view  proves  this  to  have  been  the  result  in  many- 
cases.  I  venture  to  say  that,  with  but  one  or  two  exceptions,  not  a  rail- 
road in  the  States  of  Ohio,  Indiana,  or  Illinois  has  been  able  to  escape 
bankruptcy,  except  it  has  been  carried  by  or  become  part  of  one  of  the 
trunk  lines,  or  some  great  Western  railroad  corporation.  Several  of 
these  small  railroads  have  been  through  bankruptcy  more  than  once. 

The  annual  reports  of  the  Pennsylvania  Railroad  Company  for  a 
number  of  years  showed  that  the  operations  of  the  roads  west  of  Pitts- 
burgh and  Erie  controlled  by  that  corporation  resulted  in  a  loss;  while 
the  traffic  secured  from  those  roads  to  the  lines  east  of  Pittsburgh  and 
and  Erie,  may  have,  and  doubtless  did,  yield  a  revenue  that  has  rendered 
the  operation  of  those  roads  as  a  whole,  profitable  to  that  corpora- 
tion. 

What  is  known  as  the  Bee  Line,  running  from  Cleveland  to  Colum- 
bus, Cincinnati,  Indianapolis,  and  St.  Louis,  which  was  forced  by  its 
competitors  to  adopt  the  policy  of  the  trunk  lines,  although  running 
through  a  magnificent  and  thickly-populated  country,  yielding  an  im- 
mense traffic,  has,  because  debarred  from  securing  local  rates  upon 
any  of  its  traffic,  avoided  bankruptcy  with  the  greatest  difficulty,  and  it 
is  to-day  struggling  to  meet  a  large  debt.  The  average  rate  per  ton  per 
mile  received  by  that  company  for  the  transportation  of  property  has 
been  less  than  that  of  any  other  railroad  in  the  country — less  than  that  of 
any  of  the  trunk  lines  who  have  so  selfishly  thrust  this  policy  upon  their 
Western  connections,  and  by  so  doing  have  inflicted  losses  amounting  to 
millions  of  dollars  upon  the  original  investors  in  Western  railroads.  The 
control  of  this  road  is  believed'to  be  held  by  the  interests  that  control 
the  New  York  Central.  Very  likely,  the  interest  which  may  have  been 
acquired  at  a  price  less  than  it  cost  the  original  investors,  is  indirectly 
remunerative  ;  since  by  the  adjustment  of  rates  the  traffic  originating  at 
stations  on  this  line,  which  ought  in  justice  to  yield  a  local  revenue  to 
the  C.  C.  C.  &  I.  Co.  is  secured  to  the  controlling  line.  This  adjust- 
ment of  rates  amounts  to  a  practical  prohibition  against  the  movement  of 
all  articles  produced  at  intermediate  stations  on  the  east  and  west  lines 
to  the  south.  From  the  foregoing,  I  think,  it  will  be  seen  how  the  policy 
of  adjusting  rates  so  that  the  charge  for  a  longer  distance  to  and  from 
competitive  points  shall  in  no  case  be  less  than  to  and  from  intermediate 
local  stations,  may  promote  the  interests  of  the  great  trunk  lines,  and  at 
the  same  time  be  disastrous  to  the  interests  of  the  smaller  corporations; 
and  how  such  a  policy  may  tend  to  concentrate  the  commerce  of  the 
country  at  eastern  sea-board  cities,  while  at  the  same  time  it  has  a  tend- 
ency to  retard  the  prosperity  of  the  West  and  the  South. 

As  representing  the  Louisville  and  Nashville  Railroad  Company,  I 
can  speak  with  confidence  as  to  the  disastrous  results  from  the  enforced 
adjustment  of  rates  upon  the  basis  of  not  less  for  the  longer  than  for  the 
shorter  distance.  The  Louisville  and  Nashville  Railroad  Company  is  the 
owner  of  a  railroad  extending  across  the  State  of  Illinois  from  East  St. 
Louis,  111.,  to  Evansville,  Ind.,  with  a  branch  from  McLeansboro  to 
Shawneetown,  111.  This  property  was  acquired  by  purchase  at  a  bank- 
rupt sale.  During  the  fiscal  year  ending  June,  1886,  the  results  on  this 
railroad  were  as  follows: 


INTER -STATE    COMMERCE    LAW.  201 

Gross  earnings $837,104  71 

Operating  expenses,  interest,  and  taxes 1,019,517  08 

Loss $182,412  37 

This  result  is  wholly  due  to  the  low  rates  which  circumstances  and 
conditions  compel  the  management  to  accept  for  the  transportation  of 
local  traffic,  such  rates  being  partly  due  to  the  action  of  competing  lines 
in  adjusting  rates,  as  hereinbefore  described,  and  partly  due  to  the  regu- 
lation of  rates  by  the  State  of  Illinois  through  its  railroad  commission, 
which  absolutely  prohibits  charging  or  receiving  less  for  the  longer  than 
for  the  shorter  distance  under  any  circumstances.  As  an  illustration  of 
the  ill  effects  of  the  prohibition  by  the  State  of  Illinois,  the  railroad 
company  makes  no  attempt  to  compete  with  the  water  lines  for  the 
transportation  of  property  between  Shawneetown,  111.,  and  East  St. 
Louis  and  St.  Louis.  Consequently,  the  traffic  over  forty  miles  of  rail- 
road, from  Shawneetown  to  McLeansboro',  is  so  light  that  one  mixed 
passenger  and  freight  train  each  way,  six  days  in  the  week,  is  all  that  is 
operated,  and  is  really  more  than  the  traffic  requires.  "Were  the  restric- 
tions against  charging  more  for  the  shorter  than  for  the  longer  distance 
removed,  it  is  probable  that  a  traffic  in  lumber  and  other  heavy  articles 
might  be  developed  that  would  enable  the  company  to  furnish  increased 
facilities  and  add  something  to  the  net  earnings. 

Fortunately,  perhaps,  the  earnings  of  the  Southern  roads  from  local 
traffic  are  so  many  times  greater  than  from  competitive  traffic,  and  the 
competitive  points  are  so  widely  separated,  that  the  effort  of  the  trunk 
lines  and  their  Western  connections  to  force  their  adjustment  of  rates- 
upon  the  Southern  roads  must  necessarily  fail. 

I  do  not  believe  there  is  any  necessity  for  disturbing  the  commerce 
of  that  portion  of  the  country  at  least  which  lies  south  of  the  Ohio  and 
Potomac  rivers  and  east  of  the  Mississippi.  I  do  believe  that  the  law 
was  enacted  to  secure  just  and  reasonable  rates  and  to  prevent  unjust 
discrimination.  I  do  not  believe  that  it  was  intended  to  disturb  the  ex- 
isting friendly  and  mutually  favorable  and  just  commercial  conditions 
that  exist  between  the  carriers  and  the  shippers,  or  that  it  was  intended 
to  financially  embarrass  either  carriers  or  commercial  communities;  and 
1  do  not  believe  that  it  will  so  result,  if  the  carriers  of  the  country  intel- 
ligently construe  its  provisions  and  make  an  earnest  and  honest  endeavor 
to  comply  therewith.  If  they  do  this  I  believe  they  will  receive  the 
support  of  your  Commission  and  of  the  courts.  If  any  of  the  require- 
ments of  the  act  are  of  doubtful  meaning  no  action  should  be  taken  un- 
til the  meaning  is  made  clear,  avoiding  sudden  and  radical  changes 
which  tend  to  disturb  the  commerce  of  the  country. 

Ours  is  not  a  despotic  Government.  If  our  legislators,  under  our 
cumbersome  methods  of  legislation,  in  endeavoring  to  legislate  upon  a 
Avholly  new  subject — for  I  believe  this  is  the  first  attempt  of  Congress  to 
legislate  on  this  subject — have  enacted  a  law  which  is  evidently  a  piece 
of  patchwork,  incoherent  in  its  terms,  and  subject  to  different  interpre- 
tations, and  providing  for  its  becoming  effective  simultaneously  with 
the  time  when  your  Commission,  created  to  administer  it,  is  authorized  to 
act,  the  carriers  were  not  justified  in  placing  an  illiberal  construction  up- 
on it,  and  arbitrarily  taking  action  that  creates  a   disturbance  in  the 

14 


202  INTER -STATE    COMMERCE    LAW. 

commerce  of  the  country  and  threatens  a  general  commercial  disaster. 
Assuredly  there  is  not,  and  there  never  has  been,  any  danger  of  carriers 
being  punished  for  violating  a  law  whose  provisions  are  not  clearly  un- 
derstood. They  will  not  be  punished  except  they  wilfulty  violate  the 
law  after  its  provisions  have  been  construed  by  the  proper  authorities. 

As  heretofore  stated,  the  views  of  some  of  the  members  of  this  com- 
mittee do  not  coincide  with  mine;  but  for  the  reasons  given  we  are  all 
agreed  upon  the  necessity  of  asking  your  Commission  to  exercise  the  au- 
thority delegated  to  you  by  section  4  of  the  act,  in  that  we  "be  author- 
ized to  charged  less  for  longer  than  for  shorter  distances  for  the  trans- 
portation of        *        *        *        property." 

For  convenience,  to  lighten  the  labor,  and  to  facilitate  progress,  we 
will  divide  the  questions  to  be  submitted  into  six  classes. 

First.  That  we  "be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of  *  -  *  property  " 
where  the  property  transported  between  the  longer  distances  is  secured 
in  competition  with  the  water  carriers  not  subject  to  the  provisions  of 
the  act. 

There  are  many  instances  of  this  class  of  competition.  It  exists  be- 
tween Boston,  New  York,  Philadelphia,  Baltimore  and  Richmond,  Wil- 
mington, Savannah,  Mobile,  New  Orleans,  Montgomery,  Selma,  Mem- 
phis, etc.  Between  Louisville  and  Cincinnati,  between  Cincinnati, 
Louisville,  and  Owensboro,  Ky. ;  Evansville,  Ind.;  Memphis,  Tenn.; 
New  Orleans,  La.:  Mobile,  Ala.;  Montgomery,  Ala.;  Selma,  Ala.,  etc. 

Second.  That  we  "  be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of  *  *  *  property  " 
where  the  traffic  for  the  longer  distance  is  taken  in  competition  between 
rail  lines  and  rail  and  water  lines  which  may  or  may  not  be  subject  to 
the  provisions  of  the  act. 

There  are  numerous  instances  of  this  kind  of  competition.  For  ex- 
ample, between  Baltimore  and  Richmond;  New  York  and  Nashville, 
Tenn.;  Memphis,  Tenn.;  Montgomery,  Ala.;  Selma,  Ala.;  between  St. 
Louis  and  Nashville,  Tenn.;  Montgomery,  Ala.;  Selma,  Ala.;  Atlanta, 
Ga.,  etc. 

Third.  That  we  "be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of  *  *  *  property  " 
where  the  property  moved  between  the  more  distant  points  is  taken  in 
competition  between  rail  and  water  lines,  and  rail  and  water  lines  subject 
to  the  provisions  of  the  act. 

Instances  of  this  kind  of  competition  are  shown  in  the  case  of  traf- 
fic between  eastern  cities  and.  Atlanta,  G-a. ;  Macon,  Ga. ;  Augusta,  Ga. ; 
Chattanooga,  Tenn.,  etc. 

Fourth.  That  we  "be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of  *  *  *  property  " 
when  the  property  moved  between  the  more  distant  points  is  taken  in 
competition  between  rail  lines  and  rail  lines. 

This  class  of  competition  occurs  in  the  case  of  traffic  between  Cin- 
cinnati, Ohio,  and  Chattanooga,  Tenn.;  between  Louisville,  Ky.,  and 
Chattanooga,  Tenn. ;  Atlanta,  Ga. ;  Montgomery,  Ala.,  etc. 

Fifth.  That  we  "  be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of        *        *        *        property  " 


INTER -STATE    COMMERCE    LAW.  203 

when  the  property  is  moved  between  competitive  points  connected  only 
by  a  single  direct  rail  line;  the  rates  between  sueli  competitive  points  be- 
ing fixed  or  controlled  by  competition  of  other  carriers  competing  for 
the  traffic  between  one  of  the  points  and  other  points,  or  between  other 
points  and  other  points. 

Sixth.  That  we  "  be  authorized  to  charge  less  for  longer  than  for 
shorter  distances  for  the  transportation  of  *  *  *  property"  when 
the  property  is  moved  to  and  from  points  "under  circumstances  and 
conditions"  which  are  believed  to  be  "substantially  similar." 

While  the  six  classes  described  do  not  embrace  all  the  different  con- 
ditions of  competition,  and  while  the  different  clashes  shade  or  blend  into 
one  another,  still  it  is  believed  that  your  decision  upon  one  case  in  each 
class  will  practically  be  a  decision  upon  the  larger  portion  of  the  applica- 
tions which  the  carriers,  members  of  this  Association,  may  submit  for 
your  decision  in  the  future. 

First.  Application  is  hereby  made  to  charge  less  for  the  transporta- 
tion of  property  between  Louisville,  Ky.,  and  Memphis,  Tenn.,  than  for 
shorter  distances  on  the  same  line,  to  the  extent  that  the  rail  carriers  may 
be  enabled  to  adjust  their  rates  of  transportation  so  as  to  enable  them  to 
successfully  compete  with  water  carriers  between  the  same  points,  with- 
out making  any  reduction  from  present  rates  to  and  from  or  between 
intermediate  local  stations. 

The  roads  now  forming  the  Louisville  and  Memphis  line  of  the 
Louisville  and  Nashville  Railroad  Conipan}^  were  not  primarily  con- 
structed with  a  view  of  competing  for  through  traffic.  As  the  Louisville 
and  Nashville  railroad  was  extended  from  Louisville  in  a  southerly  direc- 
tion, traffic  shipped  from  Memphis  destined  to  points  like  Elizabethtown, 
Ky.,  were  shipped  to  Louisville,  by  water,  thence  to  destination  by  rail, 
the  aggregate  charge  being  that  to  Louisville  plus  the  rate  from  Louis- 
ville to  destination.  Property  shipped  from  Louisville,  K}*.,  to  Browns- 
ville, Tenn.,  was  shipped  to  Memphis  by  water,  thence  to  Brownsville 
by  rail,  the  aggregate  charge  being  that  to  Memphis  plus  the  rate  from 
Memphis  to  destination. 

When  the  rail  line  was  completed  rates  of  transportation  by  the  rail 
line  from  Memphis  to  Elizabethtown  were  materially  reduced  and  the 
facilities  and  character  of  service  greatly  improved.  The  same  is  true  in 
the  case  of  Louisville,  Ky.,  and  Brownsville,  Tenn.  Yet  the  rates 
received  were  in  excess  of  the  charges  by  the  water  carriers  for  the  trans- 
portation of  like  kind  of  property  between  Louisville,  Ky.,  and  Mem- 
phis, Tenn. 

Your  attention  is  invited  to  the  following  comparative  table,  show- 
ing tonnage,  ton  miles,  revenue,  and  rate  per  ton  per  mile  received  for 
the  transportation  of  property  to  and  from  local  stations  between  Louis- 
ville and  Memphis;  and  tons,  ton  miles,  revenue,  and  rate  per  ton  per 
mile  received  for  the  transportation  of  property  passing  between  Louis- 
ville and  Memphis,  and  the  total  tons,  ton  miles,  revenue,  and  aver.- sue 
rate  per  ton  per  mile  received  from  local  and  competitive  traffic  on 
the  line  between  Louisville  and  Memphis  for  the  fiscal  year  ending 
June,   1886: 


204 


INTER -STATE    COMMERCE    LAW 


Traffic. 

Tons. 

Ton  miles. 

Revenue. 

Rate  per  ton 
per  mile. 

Percent- 
age. 

Local _ 

Competitive  . 

518,949 
26,595 

47,037,878 
10,026,315 

$767,155.93 
94,669.27 

1.6306c. 
.9940 

89.1 
10.9 

Total 

545,544 

57,064,193 

861,825.20 

1.6153 

100 

Note.— Only  one-half  of  the  traffic  passing  between  stations  on  main 
stem  from  Memphis  to  Louisville  is  included. 

The  cost  to  the  Louisville  and  Nashville  Railroad  Company  of  its 
road  between  Memphis  Junction  and  Memphis  and  one-half  the  cost  of 
the  road  between  Memphis  Junction  and  Louisville,  with  average  equip- 
ment, has  been  $16,500,000,  on  which  the  interest  charge,  at  six  per  cent. 
per  annum  is  $990,000.  The  earnings  from  local  and  through  traffic 
over  that  portion  of  the  line  between  Memphis  Junction  and  Memphis 
added  to  the  earnings  derived  from  transportation  of  traffic  passing 
between  Louisville  and  Memphis  added  to  one-half  the  earnings  from 
the  transportation  of  traffic  between  stations,  Louisville  to  Memphis 
Junction  included,  have  not  in  any  year  been  sufficient  to  pay  operating 
expenses  and  the  interest  charge.  This  is  conclusive  evidence  that  the 
charges  are  not  unjust  nor  unreasonable. 

It  only  requires  a  glance  at  the  foregoing  figures  to  show  that,  if  the 
company  is  to  choose  between  reducing  the  rates  for  transportation  of 
property  to,  from,  and  between  intermediate  stations  so  that  the  charge 
shall  not  in  any  case  exceed  that  received  for  the  transportation  of  prop- 
erty between  Louisville  and  Memphis  and  abandoning  the  competitive 
traffic,  it  will,  in  justice  to  all  parties,  choose  the  latter.  Financial  em- 
barrassments might  and  probably  would  result  to  the  company  from  the 
adoption  of  either  course.  Nevertheless,  it  would  plainly  be  the  duty  of 
the  management  to  choose  the  course  that  would  involve  much  the 
smaller  loss,  and  endeavor,  by  reducing  facilities  and  expenses,  to  avoid 
bankruptcy. 

Second.  Application  is  hereby  made  for  authority  to  charge  less  for 
the  transportation  of  property  between  New  York  and  Nashville,  Tenn., 
than  for  shorter  distances  to  the  extent  that  the  rail  and  water  carriers 
may  be  enabled  to  adjust  their  rates  so  as  to  successfully  compete  with 
the  rates  established  by  the  all-rail  lines,  without  making  any  reduction 
in  present  rates  to  and  from  or  between  intermediate  points. 

In  this  instance  the  maximum  rate  that  can  be  charged  from  New 
York  to  Nashville  is  the  rate  from  New  York  to  Louisville  plus  the  rate 
from  Louisville  to  Nashville. 

We  have  here  the  paradox  of  water  and  rail  lines  asking  for  author- 
ity to  make  the  same  relative  rates  between  the  points  named  as  are  made 
by  the  all-rail  lines,  the  rates  by  the  all-rail  lines  being  fixed  by  water 
competition.  By  an  arrangement  that  has  been  in  effect  for  many  years 
the  rates  from  New  York  to  Louisville  are  made  relative  to  the  rates 
from  New  York  to  Chicago,  the  rates  between  the  two  last-named  points 


INTER -STATE    COMMERCE    LAW.  205 

being  fixed  during  a  large  portion  of  the  year  by  the  rates  charged  by 
the  canal  and  lake  and  the  rail  and  lake  carriers/  The  rate  from  Louis- 
ville to  Nashville  is  fixed  hy  competition  with  the  river  carriers  between 
those  points. 

Practically,  therefore,  the  rail  line,  New  York  to  Nashville,  becomes 
the  shorter  line,  or  the  line  by  which  the  rates  between  the  two  points 
are  fixed.  It  follows  that  the  competing  ocean  and  rail  lines  via  Norfolk, 
Savannah,  Charleston,  etc.,  must  make  corresponding  rates  if  they  are  to 
compete  for  the  traffic.  Again,  it  has  been  the  custom  to  make  the  rates 
from  New  York  to  Nashville  relative  to  the  rates  from  New  York  to 
Memphis.  The  rates  between  the  two  last-named  points,  on  many 
classes  of  freight,  are  fixed  by  competition  of  the  water  line  and  the  rail 
and  water  lines  from  New  York  via  New  Orleans  to  Memphis.  The 
rate  from  New  York  to  Murfreesboro',  Wartrace,  Shelbyville,  and  other 
stations  between  Nashville  and  Chattanooga  are  made  by  adding  to  the 
rate  from  New  York  to  Nashville  the  rate  from  Nashville  to  those 
stations.  The  rates  from  New  York  and  other  Eastern  cities  to  Nash- 
ville, fixed  as  hereinbefore  described,  are  upon  a  much  lower  basis  than 
the  Southern  lines,  members  of  this  Association,  can  afford  to  adopt 
between  intermediate  points.  The  territory  served  by  the  lines  in  this 
Association,  as  compared  with  that  served  by  the  trunk  lines  north  of 
the  Ohio  river,  is  much  more  thinly  inhabited,  and  relatively  the  tonnage 
moved  is  much  less. 

Third.  Application  is  hereby  made  for  authority  to  charge  less  for 
the  transportation  of  property  between  New  York  and  Macon,  Ga.,  than 
for  shorter  distances. 

The  maximum  rates  that  can  be  secured  for  the  transportation  of 
property  from  New  York  to  Macon  are  made  by  adding  to  the  steamer 
rate  from  New  York  to  Savannah  the  rail  rate  from  Savannah  to 
Macon.  Practically  this  becomes  the  short  line,  or  the  line  that  fixes 
the  rate. 

There  are  two  lines  competing  for  the  traffic  via  Savannah,  viz., 
the  steamships  and  the  Central  railroad  of  Georgia,  and  the  steamships 
and  the  Savannah,  Florida  and  Western,  and  the  East  Tennessee,  Vir- 
ginia, and  Georgia  roads  via  Jessup. 

There  are  several  lines  via  other  routes  competing  for  the  traffic  be- 
tween the  same  points,  viz.,  the  line  via  Brunswick,  the  line  via  Charles- 
ton, the  line  via  Port  Royal,  the  Coast  Line  via  Norfolk,  the  Eas1 
Tennessee,  Virginia  and  Georgia  via  Norfolk,  and  the  Richmond  and 
Danville  road  via  West  Point. 

All  these  lines  compete  for  traffic  from  New  York  to  Chattanooga, 
Atlanta,  and  all  points  between  Chattanooga  and  Macon.  As  rates  are 
at  present  adjusted,  the  rates  from  New  York  via  Savannah  to  all  points 
north  of  Macon  are  greater  than  to  Macon.  It  will  at  once  be  seen  that 
unless  authority  be  given  to  the  lines  approaching  Macon  from  the  north 
to  accept  less  rates  on  shipments  from  New  York  to  Macon  than  to  inter- 
mediate points,  those  lines  will  be  prevented  from  competing  for  ship- 
ments to  Macon,  though  a  point  on  their  own  lines.  On  the  other  band, 
unless  authority  be  given  to  the  lines  working  via  Savannah  and  Bruns- 
wick, and  approaching  Macon  from  the  south,  to  accept  less  for  the 
longer  than  for  the  shorter  distance,  they  will  be  prohibited  from  com- 
peting for  traffic  to  points  on  their  own  lines  north  of  Macon. 


203  INTER -STATE    COMMERCE    LAW. 

Fourth.  Application  is  hereby  made  for  authority  to  charge  less  for 
the  transportation  of  property  between  Cincinnati,  Ohio,  and  Chat- 
tanooga, Tenn. ,  than  for  shorter  distances  on  the  same  line. 

The  rates  from  Cincinnati  to  Chattanooga  are  nominally  made  by 
competition  between  two  rail  lines,  to  wit,  the  Cincinnati  Southern  rail- 
way. 886  miles,  and  the  Louisville  and  Nashville  railroad,  446  miles.  In 
practice  the  rates  are  made  relative  to  rates  from  other  points  to  Chat- 
tanooga, and  relative  to  rates  from  Cincinnati  and  other  points  to  other 
competitive  points  south  of  Chattanooga  and  the  Memphis  and  Charles- 
ton railroad,  viz.,  Montgomery,  Selma,  Birmingham,  Ala.,  Atlanta,  Ga., 
etc.;  also  on  some  classes  of  freight  relative  to  rates  from  Baltimore, 
Philadelphia,  New  York,  etc.,  to  Chattanooga  and  other  competitive 
points  in  the  territory  of  the  Association. 

For  some  years  the  custom  has  been,  whenever  the  rates  were 
reduced  or  advanced  from  Eastern  cities  to  Chattanooga,  Atlanta,  Mont- 
gomery, and  Selma,  corresponding  changes  were  made  in  rates  on  some 
classes  of  property  from  Cincinnati  to  Chattanooga.  Again,  the  custom 
has  been  that  whenever,  for  any  cause,  the  rates  were  reduced  or  ad- 
vanced from  Louisville,  St.  Louis,  Chicago,  etc.,  to  Chattanooga  and 
other  competitive  points  in  the  territory,  corresponding  changes  were 
made  in  rates  from  Cincinnati  to  Chattanooga.  In  this  way  water  com- 
petition does  affect  indirectly  rates  from  Cincinnati  to  Chattanooga.  For 
instance,  rates  from  St.  Louis  to  Chattanooga,  Montgomery,  Sehna,  Bir- 
mingham, etc.,  may  and  often  are  reduced  by  the  water  and  rail  lines 
via  Cairo,  111.;  Columbus,  Miss.;  Memphis,  Tenn.;  Vicksburg,  Miss., 
and  New  Orleans,  La.  Rates  from  Eastern  cities  to  Montgomery  and 
Selma  may  be,  and  often  are,  affected  by  water  and  rail  competition  via 
New  Orleans  and  Pensacola,  and  by  water  competition  by  ocean  to 
Mobile,  and  by  river  thence  to  Selma  and  Montgomery. 

If  the  Louisville  and  Nashville  Railroad  Company  can  not  have  the 
right  to  make  rates  between  Cincinnati  and  Chattanooga  as  low  at  least 
as  those  made  by  the  Cincinnati  Southern  Railroad  Company  between 
the  same  points,  without  reducing  its  rates  from  Cincinnatf  to  inter- 
mediate stations,  and  from  intermediate  stations  to  intermediate  stations, 
it  must  necessarily  surrender  all  the  traffic  to  the  shorter  line. 

Fifth.  Application  is  hereby  made  for  authority  to  charge  less  for 
the  transportation  of  property  between  Nashville,  Tenn.,  and  Birming- 
ham, Ala.,  than  for  shorter  distances  on  the  same  line. 

The  direct  rail  line  from  Nashville  to  Birmingham  is  208  miles  long. 
There  is  a  less  direct  line  via  Chattanooga,  but  owing  to  its  indirectness 
and  other  conditions  the  direct  line  has  no  competition.  In  this  case  the 
competition  is  purely  that  of  market  with  market  and  product  with 
product,  "the  most  potent  factor  of  competition." 

In  adjusting  the  rates  between  the  numerous  points  reached  by  the 
carriers,  members  of  this  Association,  continuous  and  persistent  efforts 
have  been  made  to  secure  and  always  maintain  a  fair  and  equitable  rela- 
tive adjustment.  If  the  rates  from  Cincinnati  to  Chattanooga,  Atlanta, 
Montgomery,  Birmingham,  etc.,  were  reduced,  corresponding  reduc- 
tions were  made  from  all  other  points,  including  Nashville,  to  the  same 
points.  If  competition  between  rail  lines  and  rail  and  water  lines  from 
St.  Louis  to  Selma,  Montgomery,  Birmingham,  etc.,  caused  a  reduction 


INTER -STATE    COMMERCE    LAW.  207 

in  rates,  corresponding  reductions  were  made  from  other  points,  includ- 
ing Nashville.  The  same  is  true  on  some  classes  of  freight  from  eastern 
cities.  If  the  rates  for  any  reason,  from  New  York  to  Atlanta,  Ga., 
Chattanooga,  Tenn.,  etc.,  were  reduced,  corresponding  reductions  were 
made  from  points  in  the  West,  including  Nashville,  to  the  same  points. 

Sixth.  Application  is  hereby  made  for  authority  to  charge  less  for 
the  transportation  of  property  between  New  York  and  Knoxville,  Tenn., 
than  for  shorter  distances  on  the  same  line. 

Knoxville,  Tenn.,  is  located  on  the  East  Tennessee,  Virginia  and 
Georgia  Railroad,  nearly  midway  between  Bristol  and  Chattanooga. 
Since  the  settlement  of  that  part  of  the  country,  it  has  been  the  largest 
and  most  important  business  point  in  East  Tennessee.  Many  years  ago 
the  managers  of  the  East  Tennessee,  Virginia  and  Georgia  Railroad  in- 
augurated the  policy  of  adjusting  rates  with  a  view  of  making  Knoxville 
the  point  for  the  interchange  of  commodities  for  all  the  surrounding 
country.  In  pursuing  this  policy  relatively  low  rates  were  made  from 
Eastern  cities  and  other  points  to  Knoxville.  Encouraged  by  this,  a 
large  number  of  persons  engaged  in  business  in  Knoxville  and  invested 
a  large  amount  of  capital  in  trade.  A  sudden  change  in  the  adjustment 
of  rates  to  and  from  Knoxville  would  be  disastrous  to  some  interests. 
While  the  present  method  of  adjusting  the  rates  in  this  case  may  be  inde- 
fensible, and  while  it  is  believed  to  be  the  only  instance  where  a  discrim- 
ination of  the  kind  exists  that  is  not  forced  by  competition,  yet  it  would 
be  manifestly  unjust  to  suddenly  disturb  the  commercial  relations  be- 
tween Knoxville  and  its  surrounding  communities,  which  would  involve 
many  in  distress  without  benefit  to  any.  If  rates  of  transportation  to 
Knoxville  are  advanced,  no  material  advantages  accrue  to  the  surround- 
ing communities,  for  in  that  case  they  would  continue  to  pay  the  same 
rates  as  before.  This  seems  to  be  a  case  where  your  Commission  may 
justly  authorize  an  adjustment  of  rates,  temporarily  at  least,  the  same  as 
has  been  in  effect  for  so  long  a  time  past. 

In  considering  the  foregoing  applications,  it  is  essential  that  your 
Commission  do  not  lose  sight  of  the  important  fact  that  the  basis  now 
and  heretofore  used  keeps  the  relative  adjustment  of  rates  the  same,  not 
only  between  competitive  points,  but  between  competitive  points  and 
local  stations.  Keeping  in  mind  that  the  competitive  points  in  this  ter- 
ritory are  the  basing  points  upon  which  rates  to  and  from  local  stations 
are  fixed,  the  system  upon  which  rates  are  adjusted  becomes  compara- 
tively simple  and  produces  rates  throughout  the  entire  territory  that  are 
just  and  reasomable. 

The  rates  to  and  from  intermediate  stations  apply  mainly  to  small 
shipments  of  a  miscellaneous  character.  Rates  upon  property  of  low 
value,  as  compared  with  the  weight  and  bulk,  when  shipped  in  large 
quantities  to  and  from  local  stations,  are  in  all  cases  made  relatively 
low.  The  stroug  incentive  to  traffic  agents  to  do  everything  in  their 
power  to  promote  traffic  may  be  relied  upon  to  develop  the  resource  of 
the  country  at  local  stations  to  the  fullest  extent.  In  fact,  the  acts  of  the 
Traffic  agents  must  be  closely  scrutinized  by  the  management  of  the 
various  carriers  to  prevent  the  making  of  such  rates  relatively  too  low, 
thereby  creating  unjust  discrimination. 


INTER-STATE    COMMERCE    COMMISSION. 

ORDERS  SUSPENDING  THE  LONG  AND  SHORT  HAUL  CLAUSE. 

The  Inter-State  Commerce  Commission,  at  a  session  of  said  Com- 
mission, held  at  its  rooms  in  the  City  of  Washington,  on  the  6th  dajT  of 
April,  1887,  in  the  matter  of  the  petition  of  the  Southern  Railway  and 
Steamship  Association,  application  having  been  made  to  the  Inter-State 
Commerce  Commission,  under  Section  4  of  the  Act  of  Congress  entitled 
an  Act  to  regulate  commerce,  by  the  Southern  Railway  and  Steamship 
Association,  an  organization  composed  of  the  following  Railroad  Com- 
panies, Lines  and  Systems,  and  Steamship  Lines  operating  in  connection 
therewith,  to-wit  : 

The  Alabama  Great  Southern  Railroad;  Atlanta  &  West  Point  Rail- 
road Company;  Central  Railroad  of   Georgia  system;  Cincinnati,  New 
Orleans  <fc  Texas  Pacific  Railroad  Company;  East  Tennessee,  Virginia  & 
Georgia  Railway  Company;  Georgia  Railroad  Company;  Georgia  Pacific 
Railway  Company;  Louisville  &  Nashville  Railroad  Company's  system; 
Nashville,  Chattanooga  &  St.  Louis  Railway  Company;  Norfolk  &  West- 
ern Railroad  Company;  Port  Royal  &  Augusta  Railway  Co.;  Richmond 
&  Danville  Railroad   Company;  Rome  Railroad   Company;  Savannah, 
Griffin  &  North  Alabama   Railroad  Company;    Seaboard  &   Roanoke 
Railroad  Company;  South  Carolina  Railway  Company;  South  &  North 
Alabama  Railway  Line;  Western  Railroad  of    Alabama;     Western  & 
Atlantic  Railroad  Company;    Atlantic  Coast  Line  system;    Baltimore, 
Chesapeake  &  Richmond   Steamboat   Company;  Boston  &  Savannah 
Steamship  Company;  Clyde's  Steam  Lines;  Merchants' &  Miners'  Trans- 
portation  Company;    New  York  &   Charleston   Steamship   Company; 
Ocean  Steamship  Company;  Old  Dominion  Steamship  Company;  com- 
mon carriers,  subject  to  the  provisions  of  said  Act,  for  authority  to 
charge  less  for  longer  than  for  shorter  distances  in  certain  cases;  that  is 
to  say,  for  the  transportation  of  property  from  and  to  Boston,  Mass. ; 
Providence,   R,  I.;  New  York   City,    K  Y. ;  Philadelphia,  Pa.;  Balti- 
more, Md. ;  Alexandria,  Ya. ;  Cincinnati,  O. ;  Jeffersonville,  Ind. ;  Louis- 
ville, Ky. ;  Hickman,  Ky.;  Columbus,  Ky. ;  East  Cairo,  Ky.;  Cairo,  111.; 
Henderson,  Ky. ;  Evansville,  Ind. ;  St.  Louis,  Mo. ;  and  points  northerly 
therefrom  to  and  from  Lynchburg,  Ya. ;  Danville,  Ya. ;  Strasburg,  Ya. 
Norfolk,  Ya. ;  Portsmouth,  Ya. ;  Paint  Rock,  N.  C. ;  Wilmington,  N.  C. 
Charleston,    S.   C;    Savannah,    Ga.;   Brunswick,    Ga. ;    Augusta,    Ga. 
Columbia,  S.  C;  Greenwood,  S.  C;  Laurens,  S.  C;  Spartanburg,  S.  C. 
Greenville,    S.  C. ;     Anderson,  S.  C. ;     Macon,  Ga. ;    Milledgeville,  Ga. 
Athens,   Ga.;  Gainesville,   Ga.;  Atlanta,   Ga, ;  Rome,  Ga.;  Dalton,  Ga. 
Cedartown,  Ga. ;  Chattanooga,    Tenn. ;  Gadsden,  Ala,:  Columbus,  Ga. 
Albany,   Ga.;  Fort  Gaines,  Ga.;    Eufauia,  Ala.;  Opelika,   Ala.;   West 
Point,  Ga. ;  Montgomery,  Ala.;  Selma.  Ala.;  Birmingham,  Ala.;  Annis- 

2^8 


INTER -STATE    COMMERCE    LAW.  209 

ton,  Ala.;  Mobile,  Ala.:  New  Orleans,  La.;  Pensacola,  Fla.;  Fernan- 
dina,  Fla.;  Gainesville,  Fla.;  Baldwin,  Fla.;  Callahan.  Fla.;  Meridian, 
Miss.;  Jackson,  Miss.;  Vicksburg,  Miss.;  Memphis,  Tenn.;  Nashville, 
Tenn.;  and  points  southerly  therefrom,  and  from  and  to  said  lasl  named 
points,  each  with  the  other  so  far  as  the  same  are  situated  in  different 
States,  at  lower  rates  than  are  charged  from  and  to  the  same  points  to 
and  from  local  points  intermediate,  the  points  last  enumerated,  over  the 
same  lines,  and  certain  of  said  railroads,  lines  and  systems  having  also 
severally  made  application  for  like  authority  so  far  as  said  points  are 
reached  by  them,  respectively,  and  said  common  carriers  having  pre- 
sented as  a  reason  for  granting  their  said  application  the  existence  of 
water  and  other  competition,  claiming  that  the  same  can  not  be  met 
except  by  maintaining  rates  heretofore  established  to  and  from  said 
points,  which  are  alleged  to  be  too  low  to  enable  said  common  carriers 
to  carry  on  business  if  applied  to  said  local  intermediate  points,  and  fur- 
ther claiming  that  great  disturbance  of  business  will  occur  if  the  present 
traffic  arrangements  and  rates  are  immediately  changed;  and  it  appearing 
to  the  Commission,  after  investigation  of  said  petition  and  facts  pre- 
sented in  support  thereof,  to  be  a  proper  case  for  a  temporary  order 
authorizing  the  existing  rates  to  be  maintained  for  the  time  being,  until 
the  Commission  can  make  a  complete  examination  of  the  matters  alleged 
in  said  petition  as  reasons  for  relieving  said  common  carriers  from  the 
operation  of  said  section  of  said  Act. 

It  is  ordered  that  the  said  application  be,  and  the  same  is  hereby 
granted  temporarily,  subject  to  modification  or  revision  by  the  Commis- 
sion at  any  time,  upon  hearing  or  otherwise,  and  the  said  common  car- 
riers are  hereby  temporarily  relieved  from  the  operation  of  the  fourth 
section  of  said  Act,  to  the  extent  specified  in  the  recitals  of  this  order,  and 
for  a  period  not  greater  than  ninety  days  from  this  date;  subject,  how- 
ever, to  the  restriction  that  none  of  the  said  common  earners,  while  this 
order  remains  in  force,  shall,  in  any  case,  charge  or  receive  compensation 
for  the  transportation  of  property  between  stations  on  their  respective 
lines  where  more  is  charged  for  a  shorter  than  for  a  longer  haul,  which 
shall  be  greater  than  the  rates  in  force  and  charged  and  received  by  said 
earners,  respectively,  on  the  31st  day  of  March,  1887,  schedules  of  which 
have  been  filed  with  the  Commission. 

It  is  made  a  further  condition  of  this  order  that  a  printed  copy 
hereof  shall  be  forthwith  publicly  posted  and  kept  with  the  schedule  of 
rates,  fares  and  charges,  at  every  station  upon  the  lines  of  said  common 
carriers  where  such  schedule  is  by  law  required  to  be  posted  and  kept  for 
the  use  of  the  public. 

And  it  is  further  ordered  that  the  Commission  convene  at  Atlanta, 
Ga.,  on  the  26th  day  of  April,  1887,  at  three  o'clock  p.  m.,  and  thereafter 
at  Mobile,  Ala.,  on  April  29th;  at  New  Orleans,  La.,  on  May  2d,  and  at 
Memphis,  Tenn.,  on  May  4th,  for  the  consideration  of  the  subject  matter 
of  this  petition;  at  which  places  and  times  said  common  carriers  or  any  of 
them  may  appear  and  present  application  for  said  relief,  with  evidence  in 
support  thereof,  which  applications,  in  each  case,  must  show  the  precise 
relief  desired,  the  facts  upon  which  the  same  is  claimed,  and  the  extent 
to  which  relief  from  the  operation  of  said  section  of  said  Act  is  asked  for, 
and  at  the  same  places  and  times  any  person  interested  in  opposing  any 


210  INTER -STATE    COMMERCE    LAW. 

such  applications  may  also  appear  and  be  heard,  and  at  any  time  prior  to 
May  6th,  1887,  the  Commission  will  receive  printed  or  written  communi- 
cations in  support  of,  or  in  opposition  to,  the  relief  asked  by  said  peti- 
tions. This  announcement  respecting  the  tune  and  places  of  hearing, 
and  the  method  of  procedure,  is  subject  to  change  or  enlargement  in  the 
discretion  of  the  Commission. 
For  the  Commission  : 

(Signed)  T.  M.  Cooley,  Cliairman. 

ADDITIONAL    ORDER. 

The  Inter-State  Commerce  Commission,  at  a  session  of  said  Commis- 
sion, held  at  its  rooms  in  the  City  of  Washington,  on  the  7th  day  of 
April,  1887,  in  the  matter  of  the  petition  of  the  Southern  Railway  and 
Steamship  Association,  a  verified  petition  having  been  filed  in  the  above 
entitled  matter,  setting  forth  that  certain  competitive  points  had  been 
inadvertently  omitted  in  the  petition  heretofore  filed,  on  which  an  order 
was  made  by  the  Commission,  dated  April  6th,  1887,  and  asking  for  an 
amendment  of  said  petition,  and  order,  so  that  said  points  may  be 
included  therein,  to-wit :  Petersburg,  Va. ;  Richmond,  Ya. ;  West  Point, 
Ya, ;  Raleigh,  X.  C. ;  Charlotte,  N.  CT;  Fayetteville,  N.  C. ;  Jacksonville, 
Fla. ;  Florence,  S.  C. ;  Tarboro,  N.  C.  ;  Goldsboro,  X.  C. ;  Xewberne, 
N.  C. ;  Knoxville,  Tenn.  ;  Columbus,  Miss. ;  Williamston,  X.  C. ;  Char- 
lottesville, Ya. ;  Georgetown,  S.  C. :  It  is  ordered,  after  examination  of 
said  petition,  and  consideration  of  the  matters  set  forth,  that  said  appli- 
cation be  granted,  and  that  said  petition  and  order  be  amended  nunc  pro 
tunc  by  inserting  the  names  of  said  enumerated  points  as  points  from  and 
to  which  lower  rates  may  be  charged  than  from  and  to  local  and  inter- 
mediate points,  subject  to  all  the  provisions  of  said  order  and  for  the 
limited  period  in  said  order  stated. 

On  behalf  of  the  Commission  : 

(Signed)  T.  M.  Cooley,  Chair  num. 

Reply  to  Petitions  of  Railway  Conductors,  Traders'  and  Trav- 
elers' Union  and  others. 

The  Interstate  Commerce  Commission  on  April  18,  1887,  made  pub- 
lic the  following  ruling  and  discourse: 

The  Interstate  Commerce  Commission,  Washington,  April  16. — In 
the  matter  of  the  petition  of  the  Order  of  Railway  Conductors. 

In  the  matter  of  the  petition  of  the  Traders'  and  Travelers'  Union. 

An  application  in  writing  has  been  made  to  the  commission  for  its 
answer  to  the  following  questions  propounded  on  behalf  of  the  Order  of 
Railway  Conductors: 

1.  Are  railway  companies  prohibited  from  issuing  free  transporta- 
tion to  the  immediate  families  of  employees  over  their  own  railways? 

2.  Are  railway  companies  prohibited  from  issuing  free  or  reduced 
transportation  to  officers  of  associations  composed  exclusively  of  railway 
employees,  while  those  officers  are  temporarily  out  of  railway  service  and 
exclusively  employed  by  those  associations? 

3.  May  railway  companies  issue  passes  to  employees  of  other  rail- 


INTER -STATE    COMMERCE    LAW.  211 

ways  on  the  application  of  the  employee,  or  must  such  application  come 
from  the  officer  of  the  company  by  which  he  is  employed? 

4.  May  railway  companies  issue  free  or  reduced  transportation  to 

those  who  make  railway  service  their  business  or  trade  while  temporarily 
out  of  employment  and  in  search  of  situations? 

5.  May  railway  companies  provide  free  transportation  for  delegates 
to  the  annual  conventions  of  an  association  composed  exclusively  of  rail- 
way employees  upon  certificates  from  the  officers  of  the  association  that 
they  are  such  representatives? 

6.  If  free  transportation  may  be  furnished  to  representatives  de- 
scribed in  question  5,  must  all  such  representatives  be  actually  in  the 
employ  of  some  railway,  or  may  it  include  those  who  may  be  tempor- 
arily out  of  employment  and  those  temporarily  engaged  in  other  employ- 
ments as  officers  of  such  association? 

7.  If  free  transportation  is  provided  delegates  described  in  question 
5,  may  it  include  members  of  the  immediate  families  of  delegates? 

8.  If  free  transportation  or  reduced  rates  are  provided  for  the  rep- 
resentatives of  any  one  association,  must  the  same  be  extended  to  all 
others  which  are  composed  exclusively  of  railway  employees  on 
application? 

Another  application  has  been  made  to  the  commission  on  behalf  of 
the  Traders'  and  Travelers'  Union  stating  the  system  under  which  an 
additional  allowance  of  free  baggage  has  been  heretofore  carried  by  com- 
mercial travelers  subject  to  written  agreement  for  registry  and  indemnifi- 
cation, which  system  the  commission  is  requested  to  examine  carefully 
and  advise  us  if  there  is  any  reason  wThy  a  railroad  company  desiring  to 
do  so  should  not  enter  into  such  an  arrangement  to  grant  under  stated 
terms  an  increased  allowance  of  free  baggage.  These  two  petitions,  pre- 
sented by  highly  respectable  organizations  and  raising  questions  of  im- 
mediate practical  importance,  are  representatives  of  a  large  number  of 
similar  applications  which  have  been  made  to  the  commission  for  its  con- 
struction of  provisions  of  the  "act  to  regulate  commerce,"  as  applied  to 
the  various  points  at  which  these  provisions  touch  the  customs  of  the 
past.  They  have  been  selected  simply  as  they  indicate  the  general  char- 
acter of  all  and  enable  the  commission  to  announce  certain  conclusions 
to  which  it  has  arrived  respecting  its  jurisdiction  and  its  powers. 

It  is  obvious  from  the  tenor  of  such  applications  as  these,  which 
reach  us  by  every  mail,  that  the  impression  is  generally  prevalent  that 
this  commission  has  power  to  construe,  interpret,  and  apply  the  law  by 
preliminary  judgment.  We  are  continually  appealed  to  for  decisions  in 
advance  as  to  whether  common  carriers,  said  to  be  willing  to  adopt  cer- 
tain methods  of  dealing  with  respect  to  interstate  commerce,  can  do  so 
without  subjecting  themselves  to  the  penalties  denounced  by  the  statute 
for  violating  its  provisions. 

A  careful  reading  of  the  "act  to  regulate  commerce,"  under  which 
this  commission  is  organized,  will  show  to  the  petitioners  and  others  who 
have  made  similar  applications  that  no  jurisdiction  has  been  given  us  to 
answer  questions  like  those  under  consideration.  An  expression  of  our 
opinion  on  these  subjects  at  this  time,  being  neither  a  duty  imposed  nor 
a  power  conferred  by  the  statute,  would  carry  with  it  no  judicial  efficacy 
or  sanction;  in  fact,  would  be  no  more  useful  to  the  public  or  the  carrier 
than  the  opinion  of  other  men  upon  the  same  points. 


212  INTER  -  STATE    COMMERCE    LAW. 

Two  sections  of  the  law  confer  power  upon  the  commission  to  enter- 
tain and  decide  applications  and  petitions.  Section  4  empowers  us  upon 
applications  by  a  common  carrier  to  authorize  such  common  carrier  in 
special  cases  to  charge  less  for  longer  than  for  shorter  distances,  over 
the  same  line;  and  also  to  prescribe  the  extent  of  relief  from  the  opera- 
tion of  the  former  part  of  the  same  section  which  a  designated  common 
carrier  may  from  time  to  time  enjoy.  A  large  number  of  petitions  have 
been  filed  under  this  section,  the  consideration  of  which  is  at  this  time 
engaging  the  attention  of  the  commission,  and  nothing  said  in  this 
opinion  is  to  be  treated  as  in  any  manner  bearing  thereon.  It  is  obvious 
that  applications  like  those  of  the  Railway  Conductors'  and  the  Traders' 
and  Travelers'  Union  have  no  relation  whatever  to  the  duties  imposed 
upon  us  by  section  4.  And  this  is  the  only  section  of  the  law  which  the 
commission  has  power  to  suspend  or  relax. 

Section  13  authorizes  complaints  to  the  commission  and  confers 
jurisdiction  to  entertain  the  same.  It  provides  that  any  person  com- 
plaining of  anything  done  or  omitted  to  be  done  by  any  common  carrier 
subject  to  the' provisions  of  this  act  in  contravention  of  the  provisions 
thereof  may  apply  to  said  commission  by  petition,  which  shall  briefly 
state  the  facts,  notice  and  opportunity  for  answer  having  been  given. 
Unless  satisfaction  is  made  an  investigation  is  required.  Upon  such  an 
investigation  the  commission  will  necessarily  entertain  the  consideration 
of  the  question  whether  the  conduct  complained  of  is  or  is  not  in  contra- 
vention of  the  provisions  of  the  law;  and  if  it  so  adjudge  it  is  authorized 
to  issue  a  notice  enjoining  the  carrier  from  further  violation  of  the  law 
and  to  award  reparation  for  the  injury  done,  or  both.  But  neither  the 
Railway  Conductors'  nor  Traders'  and  Travelers'  Union  complain  that 
any  common  carrier  has  violated  the  law.  On  the  contrary,  they  both 
aver  that  the  railroad  companies  do  not  now  violate  the  law,  and  do  not 
wish  to  do  so.  The  conductors  say  that  they  fear  they  will  not  receive 
passes  as  heretofore,  and  the  Traders  and  Travelers'  say  that  they  fear 
commercial  travelers  will  not  be  allowed  free  transportation  for  150 
pounds  of  extra  baggage,  as  was  allowed  last  year.  They  present  no 
complaint  of  the  provisions  of  the  law.  If  a  railroad  company  should 
issue  a  pass  to  a  conductor  and  his  family  to  attend  the  approaching  con- 
vention, or  should  transport  three  hundred  pounds  of  baggage  free  for  a 
commercial  traveler,  under  the  registry  and  indemnity  system,  and  some 
person  feeling  aggrieved  should  make  complaint  of  unjust  discrimina- 
tion, it  would  then  be  proper  for  the  commission  to  entertain  the  ques- 
tion of  whether  such  conduct  was  or  was  not  in  violation  of  the  law,  and 
if  so  whether  it  was  or  was  not  within  the  exceptions  as  stated  in  section 
22.  Complaints  may  also  be  presented  if  the  charges  made  by  the  car- 
riers are  not  considered  reasonable  and  just.  But  until  questions  of  this 
kind  come  before  us  in  the  way  clearly  indicated  by  the  statute,  it  would 
be  worse  than  useless  for  us  to  express  our  opinions  or  give  advice.  ~\Ye 
should  not  only  lay  ourselves  justly  open  to  the  charge  of  assuming 
unwarranted  authority,  but  should  also  run  great  risk  of  involving  all 
concerned  in  what  the  courts  might  afterward  hold  to  be  breaches  of  the 
law,  by  hasty  and  ill-considered  conclusions,  based  upon  ex  parte  state- 
ments and  arguments.  Although  it  might  be  desirable,  or  at  least  con- 
venient, in  respect  to  any  piece  of  new  legislation  to  have  a  tribunal 


INTER -STATE    COMMERCE    LAW.  213 

established  to  which  inquirers  might  apply  for  instruction  and  advice 
regarding  the  meaning  of  the  law  and  its  application  to  suggested  •'  cir- 
cumstances and  conditions,"  a  moment's  reflection  will  show  that  no 
such  tribunal  could  be  properly  erected.  Congress  has  not  taken  the 
management  of  the  railroads  out  of  the  hands  of  the  railroad  companies 
It  has  simply  established  certain  general  principles  under  which  inter- 
state commerce  must  be  conducted. 

It  has  enacted  in  section  1  that  all  charges  for  interstate  transporta- 
tion "  shall  be  reasonable  and  just;"  has  prohibited  in  section  2  all  man- 
ner of  unjust  discriminations;  has  forbidden  in  section  3  all  undue  and 
unreasonable  preferences  and  advantages;  has  required  in  the  same 
section  reasonable  and  equal  facilities  for  the  interchange  of  traffic,  and 
has  prohibited  in  section  5  the  pooling  of  freights.  That  in  substance  is 
the  interstate  commerce  law. 

There  is  nothing  novel  in  these  provisions.  They  simply  bring  back 
the  business  of  the  common  carriers  to  the  well-settled  principles  of  the 
common  law.  Yet  no  one  can  deny  that  there  was  urgent  need  of  their 
statutory  formulation.  Alleged  difficulties  in  putting  them  in  operation 
only  disclose  examples  of  the  extent  to  which  they  have  been  violated  in 
the  past.  These  sections  of  the  act  are  expressed  in  plain  words.  A  con- 
struction must  be  given  to  them  in  the  first  instance  by  the  carriers  and 
their  patrons.  When  a  course  of  conduct  has  been  adopted,  of  which 
complaint  is  made  that  it  violates  the  law,  the  decision  of  the  question 
will  rest  with  the  courts  or  with  the  commission,  as  the  complaining 
party  may  elect.  This  is  the  orderly  method  in  which  all  legislation  is 
administered  and  applied,  and  the  statute  in  question  presents  no  excep- 
tion. 

One  more  suggestion  may  properly  be  added.  It  appears  from  the 
numerous  petitions  that  have  been  laid  before  us  for  preliminary  advice, 
many  of  them  obviously  upon  the  suggestion  if  not  by  the  procurement 
of  the  carriers  themselves,  that  common  comment  on  the  law,  by  the  car- 
riers and  those  Mdio  have  heretofore  enjoyed  special  favors  at  their  hands, 
describe  the  system  of  penalties  which  (he  law  provides  as  extreme,  and 
the  risks  imposed  upon  unintentional  and  unwitting  violators  of  its  pro- 
visions as  enormous.  Such  comment  seems  to  us  neither  fair  nor  just. 
It  is  true  that  section  8  provides  that  for  violations  of  the  law,  and  for 
failure  to  do  an  act  which  the  law  requires,  the  offending  carrier  shall  be 
liable  to  the  injured  party  for  the  actual  damages  sustained,  together 
with  a  reasonable  counsel  or  attorney's  fee,  to  be  fixed  by  the  court,  and 
collected  with  the  costs  in  the  case.  It  is  also  true  section  10  imposes  a 
tine  of  "not  to  exceed  $5,000"  upon  common  carriers  and  their  officers, 
agents,  and  servants  who  willfully  do  or  cause  to  be  done,  or  willingly 
suffer  or  permit  to  be  done,  any  prohibited  act,  or  upon  conviction  in  a 
district  court  of  the  United  States.  The  civil  remedy  described  in  section 
8  adds  an  attorney  fee  to  the  existing  common  law  right  of  any  injured 
party  to  recover  the  full  amount  of  his  damages,  a  condition  of  affairs 
which  can  not  greatly  alarm  corporations  disposed  to  fair  dealing  ;  while 
the  criminal  remedy  given  in  section  10  obviousl}^  pertains  to  intentional 
violators  of  the  law,  and  is  in  these  cases  to  be  graduated  by  the  court 
according  to  the  enormity  of  the  offense. 

Good  faith,  exhibited  in  an  honest  effort  to  cany  out  the  require- 


214  INTER-  STATE    COMMERCE    LAW. 

ments  of  the  law,  will  involve  reasonable  and  fair-minded  officials  in  no 
danger  of  damages  or  fine.  The  elasticity  of  the  statute  in  their  favor  is 
noticeable.  The  unjust  discrimination  of  section  2  must  be  "in  a  like 
and  contemporaneous  service  in  the  transportation  of  a  like  kind  of 
traffic,  under  substantially  similar  circumstanced  conditions." 

The  preference  or  advantage  of  section  3  must  be  "undue  or  unrea- 
sonable." Throughout  the  act,  as  it  now  stands  in  confessedly  experi- 
mental form,  there  is  exhibited  an  obvious  and  generous  purpose  to 
allow  to  the  corporations  ample  scope  in  the  conduct  of  their  business 
as  common  carriers  for  the  people,  and  fair  consideration  of  every  rea- 
sonable claim,  while  insisting  upon  just,  impartial,  open,  and  consistent 
rates  of  charge  to  which  every  citizen  shall  be  subjected  alike  whose  sit- 
uation is  the  same.  Surely,  the  people  could  not  ask  for  less.  The 
language  and  the  tenor  of  the  act  wholly  fail  to  justify  railroad  man- 
agers, if  any  such  there  be,  who  refuse  to  accept  responsibility,  decline 
to  offer  rates,  neglect  to  announce  conditions  of  traffic,  embarrass  the 
customaiy  interchange  of  business,  and  impose  stagnation  upon  trade, 
while  they  "stick  in'the  bark"  of  the  phrases  and  expressions  of  the 
law,  inventing  doubts  and  imagining  dangers.  It  is  still  more  unjustifi- 
able for  railroad  companies  to  make  use  of  the  general  clauses  of  the 
law,  ignoring  its  modifying  and  enlarging  words  and  formulas  in  order 
to  impose  additional  burdens  upon  localities,  trades,  professions,  manu- 
facturers, consumers,  classes  of  travelers,  or  employees,  straining  and 
representing  every  construction  in  favor  of  the  corporate  treasury,  and 
quoting  the  new  law  as  their  authorit}'  for  all  manner  of  petty  exac- 
tions. 

The  powers  of  the  commission  are  entirely  adequate  to  cope  with 
such  conduct,  the  existence  of  which  is  not  affirmed,  although  it  has 
been  somewhat  publicly  suggested.  The  same  statute  which  enacts 
that  charges  for  like  service  shall  be  uniform  to  all,  also  provides  that 
charges  in  every  case,  and  for  every  kind  and  class  of  service,  shall  be 
reasonable  and  just.  As  the  law  is  practically  applied,  it  is  said  to  con- 
tain many  elements  of  advantage  to  the  economical  and  profitable  man- 
agement of  the  business  of  the  carriers,  which  they  have  not  been  slow 
to  apprehend  and  take  the  benefit  of.  The  commission  venture  to  ex- 
press the  hope  that  with  this  explanation  respecting  the  mutual  functions 
of  the  carriers,  and  the  commissioners  in  carrying  the  law  into  effect 
according  to  its  true  intent  and  meaning,  there  will  be  no  lack  of  good 
faith  and  active  co-operation  in  continuing  the  normal  activity  of  every 
kind  of  reputable  industiy  and  traffic  throughout  the  land,  under  favor- 
able, fair  and  reasonable  terms,  conceding  frankly  to  the  people  all  the 
rights,  benefits,  advantages,  and  equal  privileges  which  the  "act  to  reg- 
ulate commerce"  was  intended  to  secure. 

Petition  of  Transcontinental  Lines  Granted. 

On  April  23,  1887,  the  Interstate  Commerce  Commission  made  an 
order  suspending  the  fourth  section  of  the  law  for  seventy-five  days  as 
applied  to  the  transcontinental  roads,  but  subject  to  revocation  and  with 
a  proviso  that  intermediate  rates  shall  not  be  raised  above  those  in  force 


INTER -STATE    COMMERCE    LAW.  215 

on  April  20.  This  applies  to  the  Northern  Pacifie,  Southern  Pacific, 
Atchison,  Topeka  and  Santa  Fe,  and  St.  Louis  and  San  Francisco  lines. 
In  an  official  statement  accompanying  the  order  the  Commissioner  Bays  : 

"  It  is  in  evidence  before  us  that  the  rates  to  and  from  local  points  on 

some  of  the  transcontinental  lines  have  been  somewhat  reduced  since 
April  5,  and  also  that  the  through  rates  which  prevailed  prior  to  April  5 
were  the  result  of  a  war  of  rates  among  the  lines  and  produced  a  discrep- 
ancy between  local  rates  and  through  rates,  which  the  carriers  agree  was 
unreasonable  and  do  not  desire  to  return  to. 

' '  The  commission  is  earnestly  engaged  in  considering  the  course  which 
it  will  finally  adopt  in  reference  to  section  4.  Many  conflicting  interests 
have  indicated  a  desire  to  be  heard,  and  should  have  an  opportunity  be- 
fore our  final  decision  is  reached.  All  such  persons  are  invited  to  present 
facts  and  arguments.  For  the  purposes  of  this  matter  only  and  without 
authorizing  "any  general  practice  of  that  nature,  in  order  to  obtain  the 
fullest  information  and  afford  the  most  extended  facilities  to  distant 
points  of  the  country,  the  commission  will  receive  affidavits  as  to  matters 
of  fact  and  printed  or  written  arguments  or  matters  of  fact  or  of  law, 
which  should  be  presented  without  delay.  This  invitation  extends  to  the 
general  subject  of  questions  arising  under  section  4,  and  is  not  limited  to 
the  petitions  of  the  transcontinental  roads. 

'  'Meanwhile  the  attention  of  the  carriers  is  directed  to  the  propriety  of 
devoting  the  intermediate  time  to  the  preservation  and  adoption  of 
tariffs  which  shall  attempt  to  meet  in  good  faith  the  requirements  of  the 
"  act  to  regulate  commerce,"  giving  the  same  a  fair  and  reasonable  inter- 
pretation in  respect  to  all  its  various  features.  In  making  these  orders 
the  commission  does  not  finally  determine  upon  their  propriety  or  justice; 
but  only  that  pending  the  investigation  now  in  progress,  it  is  proper, 
right  and  just  that  the  permission  provided  for  be  given,  in  order  that 
the  general  business  of  the  country  shall  receive  no  unnecessary  shock  or 
damage.  The  orders  are  intended  to  prevent,  as  far  as  may  be  possible, 
the  occurrence  of  mischief  in  a  period  which,  in  a  certain  sense,  is  tran- 
sitionary  and  which  must  of  necessity  involve  changes,  the  full  extent  of 
which  can  not  at  present  be  forseen." 


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Biographical  Directory  of  the  Hallway  Officials  of 
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Natural  Principles  Regulating  Railway  Rates.    By  Gerrit 

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The  Railway  Age.  A  Weekly  Journal  devoted  to  Railway  Intelli- 
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